Category Archives: Commodities

China: An Unlikely Stabilizer in Emerging Markets

As investors grapple with the economic fallout of COVID-19 and seek to understand its impact, China has become an unexpected stabilizing force in emerging markets. Despite being the epicenter of the outbreak, Chinese equities have experienced lower volatility, minimal currency fluctuation, and less exposure to falling oil prices in the recent market environment in comparison Read more […]

Commodities Marched Downward during Month of Volatility

It is difficult to accurately express the magnitude of the health, societal, and economic costs of the COVID-19 pandemic. Through the lens of the commodities markets, the economic impact has been swift and severe. The broad-based S&P GSCI ended March down an extraordinary 29.4%, the largest monthly drop in performance in the index’s nearly 29-year Read more […]

Rapid Reset

Over the past decade, we witnessed the longest economic expansion in history. During that time, risk appetite spiked, elevated largely by deflated interest rates around the globe in the wake of the Global Financial Crisis, as accommodative monetary policy lifted many investors up the risk curve. As in previous crisis periods, elevated risk asset valuations Read more […]

No Gas Left in the Tank for Energy Equities

In our blog post from December 2019,[1] we highlighted the disparity seen last year between different sectors of the commodity futures and commodity equities markets. The second thing to watch highlighted the substantial 25% performance difference in 2019 between the S&P GSCI Energy and the S&P GSCI Equity Commodity Energy Index. However, so far in Read more […]

Oil Prices Plunge in Response to the Collapse of the OPEC+ Alliance

The S&P GSCI Brent Crude Oil has fallen by more than 30% over the first six trading days of March. On Friday, March 6, 2020, Russia opted out of a Saudi-led proposal to extend and deepen crude production cuts that had been central to a nearly three-year OPEC+ agreement to manage global oil supplies. With Read more […]

S&P Dow Jones Indices Launches First Single-Commodity Carbon Emission Allowances Index

The S&P GSCI Carbon Emission Allowances (EUA) EUR represents an expansion of the single-commodity series of indices based on the S&P GSCI and is the first index of its kind in the market. The S&P GSCI Carbon Emission Allowances (EUA) EUR is designed to provide investors with a reliable and publicly available investment performance benchmark Read more […]

Coronavirus Hits Commodities Markets in February

The S&P GSCI, a widely recognized measure of broad commodities market beta, fell 8.4% in February. The global spread of coronavirus represents a simultaneous demand and supply shock, a situation that is close to unprecedented in global commodities markets. Across these markets, losses in February were driven by the petroleum complex and livestock, while even Read more […]

Brent versus WTI Crude

Crude oil is the most abundant and most traded commodity in the world, and it is one of the first places market participants look when seeking commodity exposure. Crude oil prices are also closely watched as investors try to glean clues about global economic growth; even after the collapse of oil prices in 2014, the Read more […]

Commodities Prices Slump in January

It was a tough start to the year for commodities. The S&P GSCI ended the first month of 2020 down 10.8%, the largest month-over-month decline since November 2018. The outbreak of the coronavirus in China’s Hubei Province flustered most financial markets, and the commodities markets were hit particularly hard given the potential impact on global Read more […]

U.S.-Iran Conflict – Financial Markets Appear to Look Past Another Geopolitical Risk

The financial market’s reaction to the escalation of tensions between the U.S. and Iran have so far been muted, even benign (see Exhibit 1). A little over a week from the U.S. killing of top Iranian commander Qassem Soleimani and Iran’s response (missile attacks on U.S. army bases in Iraq), and a casual observer of Read more […]