The Dow Jones Commodity Index (DJCI) was up 3.0% for the month and up 4.4% YTD, and the S&P GSCI was up 4.4% with a YTD return of 5.8%. In December, livestock was the worst-performing sector in the indices, while industrial metals was the best. Of the 24 commodities tracked by the indices, 16 posted Read more […]
Many news headlines point to rising or falling Chinese demand growth as a main influence of commodity performance. However, there are many other fundamentals like the U.S. dollar and interest rates that drive commodities. Even in the Chinese market, there are forces besides demand growth like demand for storage and demand for metals to be used as financial Read more […]
In anticipation of the Federal Reserve’s policy meeting starting Wednesday that may raise the federal funds target rate, here’s what you need to know about how the decision impacts commodities. Historically rising interest rates are positive for commodities for two main reasons. One is the return on collateral increases, pushing up the total return. The other reason Read more […]
In the context of declining commodity prices following the global financial crisis, inverse indices became popular for market participants looking to profit from negative returns. As the oil war unfolded and drove commodity prices further down, market participants took a renewed interest in using inverse indices to bet against the market. When commodities rebounded last Read more […]
November was sandwiched between two eventful surprises, starting with the election and ending with OPEC’s agreement to cut output, that resulted in a month filled with big moves, mostly positive. The Dow Jones Commodity Index (DJCI) Total Return for the month was 2.3%, bringing its year-to-date (YTD) total return to 11.8%. The S&P GSCI Total Return Read more […]
While most of the markets have calmed as investors wait for Brexit and the Fed rate decision, industrial metals are crashing. The S&P GSCI Industrial Metals Total Return is down 8.7% month-to date (through May 23, 2016,) and on pace to record its worst month since May 2012, when it lost 9.7%. At this rate, the Read more […]
After China reported year-over-year first-quarter growth that showed signs of improvement, it overpowered negative news of the Doha oil production meeting failure and sent commodities rallying. Investors’ attention quickly shifted from oil to the other economically sensitive sector, industrial metals. Many believe the uses for metals in construction and automobile manufacturing are the driving force behind the sector. Read more […]
Copper, the most important commodity in the world, has earned the title of “Dr. Copper” for predicting economic health. Today, TD Ameritrade ran an article claiming Dr. Copper Is In, questioning whether copper hinted last year at the current slowing global growth. While prior research shows Dr. Copper is not so smart, copper is still Read more […]
Following weak Chinese economic data, several headline stories broke about commodities crashing although the only sectors with consistent losers are energy and grains. One news story stated, “Copper prices resumed their decline on Wednesday, after data showed that inflation in China slowed to the lowest level in five years, underling concerns over a slowdown in Read more […]
Below are some quotes from the latest Oil Market Report from the IEA that may overpower Chinese slowing demand growth – even with a surprise interest rate cut. “there is a degree of opacity” “The Chinese administration does not routinely disclose information… thus little up‐to‐date official information is available” “A particular uncertainty concerns the division between commercial and government storage” “unreported Read more […]
