Commodities Deliver Double-Digit Returns in the Face of Stubborn Inflation
Commodity markets remain on top of the asset class leader board with inflation drawing the ire of the Fed and other asset classes. The upside surprise in U.S. inflation spotlights the potential benefits of commodities as a diversification tool. The S&P GSCI, the leading indicator of broad commodity performance, has produced double-digit returns in 2024,…
- Categories Commodities
- Tags 2024, cocoa, commodities, gold, inflation, S&P GSCI
- Categories
- Commodities
Energy Pumps up the S&P GSCI and Markets Go Cuckoo for Cocoa
“I think it’s from all those dog-gone cocoa beans. Hey, by the way, did you guys know that chocolate contains a property that triggers the release of endorphins? Gives one the feeling of being in love.” -Willy Wonka, Charlie and the Chocolate Factory (2005) Inflation presented a direct hit to consumers at the pump, with…
Food Inflation Bites into Income as Commodities March Higher
Inflation continues to impact consumers and policymakers in negative ways. Hedging through broad commodities has proven to buffer portfolio returns, with the S&P GSCI up 5.38% this year. Going into the year, expectations of Fed rate cuts and continued declines in the Consumer Price Index (CPI) pushed inflation concerns aside. Since then, markets have experienced…
- Categories Commodities
- Tags 2024, cocoa, commodities, CPI, food prices, inflation, S&P GSCI, S&P GSCI Cocoa
- Categories
- Commodities
Twenty-First Century Fox: DJCI Gold Tops Stocks and Bonds This Century
The equity markets roared to the finish line, easily passing commodities and bonds with a 26.3% return for the S&P 500® in 2023. Much of that rally could be attributed to declining consumer price indices and favorable Federal Reserve guidance, with increased confidence in a soft landing. Declining inflation can best be observed at the…
Gold Hits All-Time Highs and DJCI Silver Tops 10% in November
“Silver and gold, silver and gold, Everyone wishes for silver and gold.” -Burl Ives My all-time favorite stop-motion animation show was the 1964 TV special Rudolph the Red-Nosed Reindeer, narrated by Burl Ives. Playing the role of Sam the Snowman, Ives sang “Silver and Gold,” paying tribute to the work of Yukon Cornelius, a prospector…
Previewing the 2024 S&P GSCI Rebalance: Big Oil’s Mojo Is Back
Long-time investors in products linked to the S&P GSCI remain keenly aware of the outsized role oil has in broad commodity performance. Reviewing the projected weights of the 2024 S&P GSCI rebalance oil is expected to remain the largest commodity in the index. WTI and Brent crude oil are projected to swap positions and collectively…
Diversifying Commodities Rise 16% in Q3 2023 as Equities Drop
Commodities, as represented by the S&P GSCI, rose over 4% in September and 16% in Q3 2023. This highlighted the potential diversification qualities of this asset class, as equities and fixed income both fell during the month. Commodities’ low correlations to other asset classes can provide a cushion when other higher-allocated asset classes drop during…
D-FENCE! Investigating Commodity Performance under a Defensive Fed
I love this time of year. August vacations are over, the kids are back in school and football season kicks off in the U.S. The Fed took its August “vacation” at the Jackson Hole Symposium, where Jerome Powell’s remarks singularly focused on price stability. Inflation has come down but “remains too high” and the Fed…
- Categories Commodities
- Tags 2023, commodities, Fed Funds Rate, inflation, S&P GSCI
- Categories
- Commodities
Hot Temperatures and a Hot Start to the Second Half of 2023 for Commodities
The S&P GSCI, the broad commodities benchmark, started the second half of the year in a blistering heat wave and rose 11% on the back of petroleum commodities, which all increased by more than 14% in July. The remaining four sectors within the S&P GSCI also rose during the month, as fears of a recession…
S&P GSCI Mid-Year Recap and Lithium Added to S&P GSCI Electric Vehicle Metals Index
Surging futures activity on CME Group’s lithium contract allowed for entry into the S&P GSCI Electric Vehicle (EV) Metals Index. This milestone reflects the changing nature of indices to maintain a representative share of the global commodities market. The largest and most recognizable benchmark for commodities, the S&P GSCI, reviews contract eligibility for existing and…
- Categories Commodities, Thematics
- Tags agriculture, Brian Luke, cattle, cobalt, cocoa, commodities, crude oil futures, energy, energy transition, iron ore, lean hogs, lithium, livestock, metals, natural gas, nickel, real assets, S&P GSCI, S&P GSCI Electric Vehicle Metals Index, sugar, sustainability, thematics
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- Commodities, Thematics