Data-Driven Commodity Research, The Commodity Report

The Commodity Report

Data-Driven Commodity Research

A unique newsletter about commodities and macro analysis in a weekly format.

Commodities

<ul>
<li>The benchmark, CRB Commodity Index, ended the week 1,4% lower.</li>
<li>What bottoms usually first? Bonds! While we may be some weeks off the low in the treasury markets, I think it’s important to remember the typical cycle of asset classes.</li>
<li>Usually, treasuries bottom first, then follow stocks and at the end commodities. We saw the same cycle peaking in 2020 with bonds peaking first, followed by stocks and now commodities.</li>
</ul>


The benchmark, CRB Commodity Index, ended the week 1,4% lower.
What bottoms usually first? Bonds! While we may be some weeks off the low in the treasury markets, I think it’s important to remember the typical cycle of asset classes.
Usually, treasuries bottom first, then follow stocks and at the end commodities. We saw the same cycle peaking in 2020 with bonds peaking first, followed by stocks and now commodities.


<ul>
<li>The benchmark, CRB Commodity Index, ended the week 1,2% lower </li>
<li>The news of the week was probably that the Atlanta FED changed its GDP now forecast drastically and signaled that a recession as soon as January 2023 is likely.</li>
<li>Commodities plunged after that news because demand destruction could become worse over time. Nevertheless, we need to differentiate.</li>
</ul>


The benchmark, CRB Commodity Index, ended the week 1,2% lower 
The news of the week was probably that the Atlanta FED changed its GDP now forecast drastically and signaled that a recession as soon as January 2023 is likely.
Commodities plunged after that news because demand destruction could become worse over time. Nevertheless, we need to differentiate.


<ul>
<li>The benchmark, CRB Commodity Index, ended the week 3,4% lower.</li>
<li>It was a tough week for investors who have long positions on commodities in place.</li>
<li>While the mass media is already calling for an end of the commodity bull market, I do think that we only see a correction, which we can use for re-entries in commodities with structural supply problems.</li>
</ul>


The benchmark, CRB Commodity Index, ended the week 3,4% lower.
It was a tough week for investors who have long positions on commodities in place.
While the mass media is already calling for an end of the commodity bull market, I do think that we only see a correction, which we can use for re-entries in commodities with structural supply problems.


<ul>
<li>Besides global growth concerns as Central Banks step up their battle against inflation, and China's zero-covid restrictions may stretch into 2023, it is quite clear what the main story was this week</li>
<li>Russia cut up to 60% of its gas flows to Germany. It will become very hard for Europe to get over the next winter if gas flows remain that low</li>
<li>Rate hiking cycles end when the Fed Funds target rate catches up to where the 2-year T-Note yield has already gone</li>
</ul>


Besides global growth concerns as Central Banks step up their battle against inflation, and China's zero-covid restrictions may stretch into 2023, it is quite clear what the main story was this week
Russia cut up to 60% of its gas flows to Germany. It will become very hard for Europe to get over the next winter if gas flows remain that low
Rate hiking cycles end when the Fed Funds target rate catches up to where the 2-year T-Note yield has already gone


The Commodity Report: CRB Commodity Index Ended the Week 5.1% Lower

Founder, Market Thinker

Mark Tinker

Founder

Market Thinker

Mark Tinker has over 35 years experience as an investor, market strategist and economist. Having spent more than 20 years as a sell side strategist and being top rated on numerous occasions and surveys he moved to investment management in 2006 to run global equity portfolios in London and subsequently moved to Hong Kong in 2013 to help establish an Investment Management business for a top 20 international asset manager. He first started writing investment weeklies for his employers in 1989, developing a style characterised under the title Market Thinking and has been a regular commentator and presenter on CNBC, Bloomberg and other business channels, where his approach of rationalising market behaviour rather than making short term predictions on high frequency market data provides a welcome balance to his client audience.

Making Sense of the Narrative

Macroeconomics

<ul><li>The market fall this year has been steady and relentless rather than a panic crash, and last month the Sell in May mantra cut through and markets switched to bear market behaviour of selling rallies and not buying dips</li><li>Much of this we believe has been associated with leveraged structures unwinding, combined with fund redemptions, especially in tech, reversing the ‘upside crash’ of last year</li><li>Confidence is picking up slightly, but the Fed is key, in particular the extent to which it actively want the markets lower</li></ul>

The market fall this year has been steady and relentless rather than a panic crash, and last month the Sell in May mantra cut through and markets switched to bear market behaviour of selling rallies and not buying dipsMuch of this we believe has been associated with leveraged structures unwinding, combined with fund redemptions, especially in tech, reversing the ‘upside crash’ of last yearConfidence is picking up slightly, but the Fed is key, in particular the extent to which it actively want the markets lower

United States

Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. It is a nonrenewable resource, also known as a fossil fuel, which means that it can't be replaced naturally at the rate we consume it and is therefore a limited resource.

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Crude Oil (CL1 COM COMDTY)

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Mark Tinker

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