In her latest market commentary, Charles Schwab Chief Investment Strategist Liz Ann Sonders looks at the recent commodities decline, and at what it might mean for stocks.

While stocks and commodities don’t always move in tandem, Sonders says, their correlation has been high since late 2008, when the “risk-off, risk-on” trade started. “It’s been our view that this elevated correlation was not to be long-lasting, and … the correlation has begun to ebb,” Sonders says. “We may not be there yet, but we do believe stocks can and should decouple from commodity prices at some point.”

Sonders also says that in the longer term, “the global demand story is largely intact”. But, she adds, “we’re beginning to see a story of demand destruction unfold where rising commodity prices choke off some economic growth.”

But she adds that the commodities declines can be a positive for the U.S. and global economies, and the stock market.

“The meaningful decline in oil, grain and textile prices is particularly positive for the emerging world given that tighter monetary policy was triggered largely due to these price escalations,” Sonders says.

Sonders also says that the source of commodities declines is important. “A retreat in commodity prices due to speculators’ exit, and not a significant global growth slowdown, should ultimately benefit the economy, stocks and longer-term investors,” she says.

As for the European debt troubles leading to steep commodities and stock declines, like the subprime mortgage crisis did in 2008, Sonders isn’t buying it. She says the Eurozone woes won’t wreak havoc on the U.S., though she says risk is “certainly elevated”.