Commodities

Continue To Underweight Commodities & Emerging Markets In Global Portfolios

Dec 11, 2023 2 min read

The global economy is growing, but at a slow pace. Much of the weakness is attributable to the recessions in China and Europe. US economic growth is slowing from Q3’s rapid pace. Much of the weakness is structural in China but cyclical in the US and Europe. The latter two are likely to grow in 2024, but China will probably remain weak. This implies that commodities and emerging markets

Ed Yardeni

Oil's Slippery Slope

Jun 5, 2023 2 min read paid

The Saudis are kicking the barrel down the road. Saudi Energy Minister Prince Abdulaziz bin Salman announced an extra 1 million barrel-a-day (mbd) supply cut in July following a tense OPEC+ meeting in Vienna over the weekend. “Others in the group pledged to maintain existing cuts until the end of 2024,” Bloomberg reported, “though Russia made no commitment to curb output further and the United Arab Emirates secured

Ed Yardeni

No Boom, No Bust

May 4, 2023 2 min read paid

Our Boom-Bust Barometer (BBB) fell into an unprecedented abyss during the pandemic lockdown in early 2020 (chart). Our BBB is the ratio of the CRB raw industrials spot price index to initial unemployment claims on a weekly basis. It is a very useful high-frequency business cycle indicator. Like the Index of Coincident Economic Indicators (CEI), it tends to peak at the tail end of booms and to bottom

Ed Yardeni

Why Is Gold Shining Again?

Jan 24, 2023 1 min read

Gold is a commodity priced in dollars. Like other commodities priced in dollars, the gold price is inversely correlated with the trade-weighted dollar (chart). The former has been rebounding since late last year as the dollar has been weakening on expectations that the Fed is almost done raising interest rates. The price of gold tends to track the underlying trend in commodity prices (chart). So its recent rebound suggests

Ed Yardeni

Copper, Mortgages, GDP, Breadth & Sentiment

Jan 11, 2023 2 min read

Yesterday, the World Bank slashed its 2023 global economic growth rate outlook to 1.7% from its earlier projection of 3.0%. In its Global Economic Prospects, the bank warned that the global economy is "perilously close to falling into recession." Dr. Copper, the metal with a PhD in economics, begs to differ. The nearby futures price of the basic metal is up to $4.17 currently from

Ed Yardeni

China's Zero-Covid Policy Is A Disaster

Nov 24, 2022 1 min read

Investors are hoping that the Chinese government will soon ease its zero-Covid policies. The facts on the ground suggest that the latest wave of the pandemic is getting worse in China and that the government is continuing to respond with more lockdowns and other severe restrictions (chart). Japanese brokerage firm Nomura estimates that more than a fifth of the country is under restricted movement. This is weighing on China&

Ed Yardeni

Copper, Gold, Bonds & Stocks

Jul 12, 2022 1 min read

The ratio of the nearby futures prices of copper to gold has been falling lately. The ratio has been a remarkably good indicator for the 10-year US Treasury bond yield.

Ed Yardeni

Will June's CPI Inflation Rate Be the Peak?

Jul 12, 2022 1 min read paid

June’s CPI will be out tomorrow. Bloomberg is showing consensus estimates of up 1.1% m/m (8.8% y/y) for the headline and 0.6% m/m (5.8% y/y) for the core inflation rates. Both y/y estimates are up from May’s rates of 8.6% and 6.0%.

Ed Yardeni

Gold Losing Its Shine

Jul 9, 2022 1 min read

Gold hasn't been a good hedge against inflation over the past highly inflationary year. That's not surprising since this precious metal's price is inversely correlated with the 10-year TIPS yield and with the trade-weighted dollar (charts below): (1) The TIPS yield fell to a record low of -1.19% on November 9, 2021. It then moved higher, especially this year, closing at

Ed Yardeni

The Dollar, Commodities, Bonds & Stocks

Jul 5, 2022 1 min read paid

What's weighing on the price of oil? We are watching the age-old adage at work: The best cure for high oil prices is high oil prices, which have depressed the global economy, as evidenced by the recent freefall in the price of copper and now the price of a barrel of crude oil. Another contributor to the weakness in oil prices and other commodity prices is the

Ed Yardeni

Will Covid Zero Be Followed by Higher Inflation?

Jun 29, 2022 1 min read paid

China's experience with Covid Zero raises the age-old question of whether the cure is worse than the disease. For global investors, the question is if and when China relaxes its Covid Zero restrictions will global inflation soar along with commodity prices?

Ed Yardeni

Dr. Copper May Be Signaling Peak Inflation

Jun 23, 2022 1 min read paid

Dr. Copper, the base metal with a PhD in economics, may be signaling a top in the CRB raw industrials spot price index. It dropped below $4.00 for the first time this year to $3.92 today (chart below). It may be predicting a global economic slowdown, but it's too soon to tell if it is foreshadowing an impending US recession.

Ed Yardeni

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