Commodities

“I predict the bull market will continue next year,” says Jeremy Siegel. “Stocks are not overpriced.”

Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to +0.83 in October from +0.32 in September. Three of the four broad categories of indicators used to construct the index made positive contributions in October, and three of the four categories increased from September. The index’s three-month moving average, CFNAI-MA3, fell to +0.75 in October from +1.37 in September.

Gold “is a hedge on policymakers screwing up, and there has been a lot of screwing up in the last 20 years.”

A new normal is the norm. Changes are inevitable and therefore imaginable, even during this era of ever-growing technological breakthroughs such as cryptocurrencies, blockchain, robo-everything, 5G, EVs, AVs, AI, VR, AR, and IoT.1 We remember when ecosystem referred to a Costa Rican rain forest.

Today I’m going to blend a few thoughts about The Great Reset with some other historical analysis I recently discovered. It adds up to a disturbing outlook, even if (as seems likely, given the latest vaccine news) we’re past the pandemic by late next year. We’ll find different challenges on the other side.

It was a bumpy ride for corporate bond investors this year. After the sharp, pandemic-driven selloff in February and March, total returns for most corporate bond investments have climbed their way back into positive territory.

Whether you’re celebrating in-person or virtually, we’re wishing you and your family a Happy Thanksgiving! Giving thanks may seem difficult to do in a year that’s resulted in the loss of so many lives, jobs, and businesses, but we believe this holiday is the perfect time to reflect on all we are grateful for.

In our view, inflation-fighting asset classes look considerably cheaper and offer higher long-term estimated returns than mainstream stocks and bonds.

With yields near zero, many investors may question the value of fixed income within a portfolio. Western Asset’s Head of Product Management, Doug Hulsey, joins our Head of Equities, Stephen Dover, to discuss fixed income investing with an active-management lens. He makes a case for the asset class for investors in light of market uncertainties and outlines where he sees opportunities today.

The yield on the 10-year note ended November 18, 2020, at 0.88%, the 2-year note ended at 0.16%, and the 30-year at 1.62%.

The US elections have implications for emerging markets in the area of global trade relations in particular, but for investors, it’s important to look at countries and companies individually within the asset class, according to Portfolio Manager Andrew Ness. He joins our Head of Equities Stephen Dover to discuss how emerging markets are navigating today’s challenges—including the COVID-19 pandemic—and note they are home to some of the most innovative and resilient companies in the world.

He is not sure when it will happen, but David Rosenberg is confident investors will face another big correction in the stock market.

The economic calendar remains less interesting than politics, market gyrations, and the coronavirus. Those will be the media topics. A bigger challenge is finding a way to identify what is important and to determine the causal relationships.

Month-over-month nominal sales in October increased by 0.37%. Real Retail Sales, calculated with the seasonally adjusted Consumer Price Index, increased by 0.23%.

Abstract investment themes are much more than entertainment. They’re serious business and have roles to play in portfolios. I share my process for incorporating then into mine.

The blue shift in the White House may signal added trouble for Big Tech companies.

This short article investigates the rebalancing premium that investors may expect from risk-parity portfolios.

Banks have begun to voluntarily disclose their exposure to climate change risks. The information is critical to bank management teams and investors, both of whom need to understand the challenges ahead.

America, and the world, received a huge shot of hope this week. The $210 billion drugmaker Pfizer announced on Monday that its coronavirus vaccine is 90% effective at preventing COVID-19.

Election results (a divided Washington) and good news on a potential vaccine boosted share prices, although there were some concerns about surging COVID-19 cases (163,402 reported on November 12) and possible difficulties in distributing the vaccine.

As investors look for signs of a return to normalcy from the coronavirus crisis, they have a dizzying array of indicators to choose from. We’ve assembled a group of signals, with the help of big data, that may point the way.

Despite the COVID-19 pandemic, emerging markets have shown a continued appetite for structural reforms that could lay the foundation for lasting economic recoveries, according to our Emerging Markets Equity team.

We came up with a theory many years ago to address how important psychology is to owning common stocks. We found that the risks go up in a stock market, or in an individual stock, when a “well-known fact” (WKF) was acted on in the extreme.

On Saturday, Joe Biden was named president-elect. In hindsight, the market clearly predicted this outcome.

Core dollar exchange rates have so far been surprisingly stable during the pandemic, most likely because major central banks’ policy interest rates are effectively frozen at or near zero. But although the current stasis could last awhile, it will not last forever.

The United States faces a $3.1 trillion annual deficit supported with interest rates at or near zero. The Fed and government are rapidly exhausting their arsenal to fight current and future recessions. Equally troubling, almost all of their actions offer little or no future benefit, but the costs stay with us.

The strategy proposed here is to always invest in sector equity ETFs. I defined two super-sector groups, classified as aggressive and defensive, each with four sector ETFs which have historically performed best from November to April and relatively well from May to October, respectively.

Defensive equities are usually found in sectors that have withstood market shocks, such as utilities and real estate. But as COVID-19 shakes up investment conventions, companies with intangible assets are being more appreciated for their volatility cushion.

Businesses love Congressional gridlock. Tech stocks had been trending down for days before the election as they faced antitrust scrutiny, but now that it appears certain Congress will remain divided, they’ve recovered most of their losses. The tech-heavy Nasdaq 100 jumped close to 10% for the week.

This commentary has been updated to include this morning's release of Nonfarm Employment. October's 638K increase in total nonfarm payrolls had revisions that resulted in 15K more jobs than previously reported. The Investing.com consensus was for 8600K jobs gained and the unemployment rate to decrease to 7.7%.

Reflecting on the post-election landscape, Jeffrey Gundlach expects a split government to emerge, with a Biden presidency, Democratic House and Republican Senate. That outcome explains the gains in U.S. equities this week, but stocks are now “really overvalued.”

The U.S. International Trade in Goods and Services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 199 and details U.S. exports and imports of goods and services. Today's headline number of -63.86B was more negative than the Investing.com forecast of -63.80B.

Just hours before the U.S. election got underway, investors pulled the most cash ever from the world’s largest exchange-traded fund tracking corporate bonds.

When you run an equity portfolio which is concentrated in 25-30 common stock selections, there are usually three stocks which stick out as particularly attractive at any given time.

Coming into the home stretch of 2020, continued concerns about COVID-19 and the political environment persist and have been feeding risk-averse sentiment for many investors. Given the year the world has experienced, it’s not surprising people are focusing on portfolio risk mitigation.

BlackRock bond experts reveal the top themes driving our fixed income outlook. Learn the latest key risks and opportunities in today’s bond market.

Want to hear something really scary? Inflation, the scourge of the modern economy, may be running much faster than we’re led to believe.

Jeffrey Gundlach, who famously predicted Trump’s victory in 2016, says the president will secure another term. David Rosenberg acknowledged that possibility, but is not so sure of the outcome. Both offered their predictions for the post-election economy and markets.

Americans with money discovered in the Depression of 1837-1842 how large the spread could become between the cash in their pockets and the values of their bank accounts and property.

In a new piece – “Covid-19, Climate Change, And The Need For A New Marshall Plan” – GMO’s Jeremy Grantham discusses the impact of Covid-19 on the economy of the developed world, arguing great strides are necessary in order for the U.S. and the world to accelerate growth.

One of the most recent mantras in the financial media is that housing prices rise because there is an inventory shortage. While it is an excellent headline for “getting clicks,” the are 3-reasons why there really is NO housing shortage.

Want to hear something really scary? Inflation, the scourge of the modern economy, may be running much faster than we’re led to believe.

Over the course of history, investors have often been tempted to believe that “this time it’s different”. However, one constant has been the utilization of commodities as a key tool for diversification. A basket of commodities has the potential to protect investors’ portfolios against a multitude of macroeconomic risks. In this webcast, Steve Dunn, CIMA®, Head of Exchange Traded Funds, Stan Kiang, Director of Strategic Accounts, and Robert Minter, CFA, CMT, CAIA, Commodities Investment Strategist, will speak on behalf of Aberdeen Standard Investments to discuss why we believe commodities are a critical component of a well-balanced investment portfolio. In addition to providing an outlook for commodities, this webinar will lay out the fundamentals underlying the need for a longer-term, strategic allocation. This webcast is eligible for Continuing Education (CE) Credit.

Learning Objectives: This webcast provides key insights and actionable strategies for diversifying with commodities. Some of the topics that will be addressed include:

• Key catalysts. for investing in commodities
• How high fees can derail the goals of commodities investors
• The importance of transparent and rules-based commodity exposure

The Census Bureau has posted the Advance Report on Durable Goods New Orders. This series dates from 1992 and is not adjusted for either population growth or inflation. Let's now review Durable Goods data with two adjustments.

The latest on how equity managers across the globe fared during the third quarter, plus how the upcoming U.S. election is impacting manager viewpoints.

2020 has proven a challenging year for numerous businesses and individuals, Grey Owl Capital Management included. While most domestic stock market indices have fully recovered from the February and March Covid sell-off, many of our accounts are still down slightly on a year-to-date basis through the end of September.

The “end of globalization” is a phrase that has come up a lot lately. Stories written about deglobalization have soared this year with the pandemic.

The tightrope walker has his blindfold off, the wind is blowing, and it’s a long way down. Technically speaking, high-yield bond prices broke downward through a “double bottom,” which could reasonably be taken as an indicator of coming trouble for the stock market as well, given the greater wariness among bond market investors this year.

The coronavirus has compressed years of changes into months. It may be the straw that broke an aging, overconfident camel’s back.

Here at U.S. Global Investors, we’re very bullish on commodities, particularly industrial and precious metals.

Today I want to discuss why the economy will recover, how that will happen and what it will look like. It won’t look like 2019, but the recovery will have its own flavor as we fast-forward future industries. I think that’s a good thing.vvv

Global Allocation Fund portfolio manager Russ Koesterich discusses the appeal of the middle area when choosing between growth versus value stocks.

In this short Q&A, Teresa Kong, Portfolio Manager, provides her insights on the economic impact of the coronavirus and where she sees risks and opportunities, and why the current prices could represent a once in a decade opportunity to buy Asia high yield.

Loomis Sayles' Senior Credit Research Analyst Ryan McGrail summarizes potential policy proposals under a Biden administration and highlights the states and regions facing the greatest risk of federal regulation.

In this presentation, we outline our argument for gold entering a new structural bull market.

Jeremy Grantham has made a science of studying asset bubbles, correctly predicting the path of the Japanese, dot-com and housing overvaluations. Today’s bubble in U.S. equities is unlike any other, he says, but it will burst in months, if not weeks.

We could also see a so-called “blue wave,” whereby the Democrats pick up control of not just the White House but also both chambers of Congress.

Despite ongoing weakness in the economy, stocks continued to rally in the third quarter. At first glance it seems perplexing, but a deeper analysis reveals that the market drivers are both rational and sustainable. In our view, the pandemic has created profound shifts in demand that have generated strong tailwinds for a wide range of firms.

The hunt for new hedges is in full gear.

What could a Biden victory mean for investors? Read our latest blog post from the Loomis Sayles Global Fixed Income Team for their views on some key campaign issues.

• Without statistical support, political party and tax regime changes have not translated to discernable market performance.
• Global fiscal and monetary stimulus during COVID already far surpass what the world saw during and after the Great Recession.
• Equity and credit markets domestically and abroad continued to shrug off headlines, helping recoup some if not all of the losses from earlier this year.
• Anchored short-term interest rates helped investment grade fixed income yet another quarter.

U.S. Treasury bonds are not likely to repeat their spectacular performance as income-producing risk reducers in portfolios of the past four decades. While bonds still have an important role to play in some settings (e.g., liability hedging for retirement plans), we believe investors should look at alternatives for diversification, including inflation-protected securities, gold, defensive currencies and stocks and option protection.

We are roughly two months removed from seeing US Equity make its way back to the number one ranked asset class in the Nasdaq Dorsey Wright DALI (Dynamic Asset Level Investing) tool. This is the eighth time going back to 2000 that US Equity has been the number one ranked asset class.

On October 8, Square SQ, the payments company helmed by Twitter CEO Jack Dorsey, announced that it purchased 4,709 Bitcoins, a $50 million investment, representing 1% of the firm’s total asset. As a result, Square became the second technology firm to go long on Bitcoin in recent months after MicroStrategy MSTR, a business intelligence firm, crowned the crypto as its treasury reserve asset of choice.

Emerging-market debt has rebounded sharply off March lows, but attractive yields and compelling opportunities persist. We provide a roadmap for what may lie ahead.

Markets continued their recovery during the 3^rd quarter, but the narrative transitioned from concerns about the pandemic to the U.S. election – a trend that we expect to continue in October. The outcome will likely have a material impact on both fiscal stimulus policies and Treasury yields.

David Dreman’s book, Contrarian Investment Strategies, was gospel to investors when it was first published in 1979. Investors had been decimated by markets going nowhere over the prior 10 years. Stock investors were ready for something new. Dreman had produced a lot of success as an investor and wanted to share his gospel of contrarian value investing.

We have a light economic calendar with a focus on housing. There are continuing political and pandemic stories that could dominate the news cycle at any time. For those focused on financial markets, earnings season might provide answers to important questions.

Will the policies of either presidential candidate move us towards a better healthcare system? In this article, I break down the challenges of healthcare reform, the policies of President Trump and former Vice President Biden, and discuss what is needed to get this country on a path of good health and an efficient healthcare system.

The OPEC+ alliance warned of a “precarious” outlook as a resurgent coronavirus pandemic hurts oil demand, dropping further hints about a potential change of policy next month.

It is a given that you should never mention the “R” word. People immediately assume you mean the end of the world: death, disaster, and destruction. Unfortunately, the Federal Reserve and the Government also believe recessions “are bad.” As such, they have gone to great lengths to avoid them. However, what if “recessions are a good thing,” and we just let them happen?

“Resilience” was this week’s theme as better-than-expected market data came to light. Earnings season has begun, and so far reports have proven the doomsayers wrong. Even industries that have been hardest hit by the economic downturn, including air travel, are expressing optimism that we’re at the “end of the beginning” in terms of recovering from the worst health crisis in 100 years.

We recently read Peter Doran’s book, Breaking Rockefeller, which is a fabulous economic history of the world from 1840-1920 and focuses on how the monopoly created by John D. Rockefeller was broken from 1890-1910. We also watched a documentary called, “The Social Dilemma,” which explains, through the eyes of some of the social media creators, how incredibly damaging the monopolies, created by internet technology, are to society.

The transition toward a more sustainable energy system presents potential opportunities for investors. We explore what those opportunities are, and identify potential watchpoints.

In his latest memo, Howard Marks walks readers through the unusual characteristics of this year’s economy; the impact of Covid-related monetary and fiscal policy actions, including low interest rates, on today’s markets; and the possible ramifications of the Fed/Treasury’s rescue efforts. What does it all mean for investors who face an environment marked by some of the lowest prospective returns in history?