The S&P GSCI was up 8.0% for the Q2 2018, with agriculture being the worst-performing sector in the index, and energy the best (see Exhibit 1). Of the 24 commodities tracked by the index, 14 finished the quarter on a positive note. Soybeans was the worst-performing commodity in the index, and Brent crude was the Read more […]
Having broken through 2% in January 2018, the 10-year U.S. Treasury breakeven rate (as measured by the difference between the S&P U.S. Treasury Bond Current 10-Year Index and the S&P U.S. TIPS 10 Year Index) has continued to increase, reaching a YTD high of 2.18% on April 23, 2018. As of May 14, 2018, the Read more […]
As oil prices continue to increase, the energy sector is rising but recently the mid and small cap stocks are outpacing the large caps. Thus far in April (month-to-date through April 12, 2018,) the energy sector is leading all other sectors, but the S&P 500 Energy (Sector) is up just 4.8% versus the gain of 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 […]
The S&P GSCI Energy Total Return gained 8.1% in July, the most for a July in 13 years, led by petroleum that was up 9.2%. Finally the fundamentals may be showing the oil market is starting to rebalance with the rest of the commodities. The S&P GSCI Total Return had its best month this year, gaining Read more […]
Commodities just had their worst start in seven years. The S&P GSCI Total Return lost 10.2% year-to-date (YTD) ending June 30, 2017, logging its worst first half (H1) performance since the first six months of 2010 when it lost 11.2%. However, it’s not the bloodbath it may seem to be. Half, or 12 of the Read more […]
Energy is back in a bear market now led by oil’s slide mainly due to rising output from Libya and Nigeria, two OPEC members exempt from cutting supply. The S&P GSCI Energy Total Return is on pace for its worst quarter since the fourth quarter of 2015 losing -13.4% quarter-to-date (through June 19, 2017.) This is driven 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 […]
No single sector dominated commodity performance in May, which means the supply-side is currently more potent than macro factors like global aggregate demand, the dollar, interest rates or inflation. Each commodity is being driven by something in its own supply/demand model, mostly unrelated to one another. That is not just lowering the intra-commodity correlation that can create buying Read more […]
The unintended consequences of OPEC’s policy (in summer of 2014) of flooding the market with oil to lower prices and gain market share are starting to show. It seems they failed to realize increasing the price by cutting back supply wouldn’t work with high U.S. inventories. The spare capacity of OPEC does not matter for Read more […]
