In today’s briefing:
- Not Your Father’s Commodity Bull
- Beware the Ides of March
Not Your Father’s Commodity Bull
- Some chartists have recently become excited over the commodity outlook. Setting aside the headline-driven rise in oil prices, the long-term chart of many commodities looks bullish.
- The latest spike in commodity prices should be interpreted as an exhaustive move as it is a supply shock that should resolve with demand destructive in the coming months.
- To the extent that investors hold or overweight energy and mining stocks, consider rotating into long-duration Treasury bonds in anticipation of a bond market rally as the economy slows.
Beware the Ides of March
- This cycle is very different from the experience of most investment managers. Reported inflation is a 40-year high and inflationary expectations are rising and war-related supply shock is creating uncertainty.
- The FOMC meeting begins on March 15, or the Ides of March, and the results could be the source of further market volatility.
- Traders will have to weigh the constructive signals from technical and sentiment indicators against the risk of further escalation in the war.
Before it’s here, it’s on Smartkarma
