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Commodities Briefing - Category | Listings/IPO/Stock Market more

Commodities Attractive As Stocks Smash Highs

Posted on 26 August 2014 by VRS  |  Email |Print

Most financial advisors suggest that their clients diversify across asset classes, with only the percentages of stocks, bonds, gold and other assets as a matter for debate. I won’t wade into the latter discussion, but the charts suggest that commodities as an asset class may be ready to play a greater role.
The Thomson Reuters CRB index, also known as the CCI index, may have found a bottom. As the Standard & Poor’s 500 reached the 2000 milestone Monday, investors should consider that commodities could be the next opportunity………………………………………..Full Article: Source

Barings backs resources sector equities over commodities

Posted on 06 August 2014 by VRS  |  Email |Print

Resources sector equities are currently more attractive than direct investments in physical commodities and investors should focus on investing in ‘companies not commodities’ to benefit from an increasing global demand for resources, according to Baring Asset Management (Barings).
The opportunity in resources equities is as strong as it has been for several years, believes Barings. Its positive outlook is based on the size of differential between what it sees as positive company specific drivers versus a negative – often macro driven – consensus view………………………………………..Full Article: Source

Wall St. and commodity risk: Morgan Stanley’s VaR dips

Posted on 18 July 2014 by VRS  |  Email |Print

The quarterly earnings of Wall Street’s biggest banks offer a glimpse into the scale of their commodity trading activity through a measure of trading risk called VaR.
On Thursday, Morgan Stanley reported its commodity Value-at-Risk (VaR) fell to $19 million in the second quarter from $20 million in the first quarter and $24 million in the second quarter of 2013. VaR is the largest amount of money that the bank could lose on 95 percent of the trading days during the period………………………………………..Full Article: Source

Why It’s Time to Explore the Stocks-Commodities Dynamic

Posted on 07 July 2014 by VRS  |  Email |Print

Commodities are outperforming stocks. The Greenhaven Continuous Commodity ETF (GCC) has gained 8.77% through the first six-months of the year, while the SPDR S&P 500 (SPY) is ahead by 7.71%.
GCC is an outstanding barometer of the broader commodities market. Unlike several larger competing commodity ETFs, GCC equally weights a basket of 17 commodity futures contracts – including gold, oil, and sugar, among others. That means no single commodity dominates GCC’s performance, giving it a broader view of what’s really happening in the commodities marketplace………………………………………..Full Article: Source

Here’s Why Gold Stocks Are on the Rise – Plus Three Picks That Will Benefit

Posted on 04 July 2014 by VRS  |  Email |Print

Gold stocks are poised for an upswing. Just recently, the European Central Bank (ECB) announced a new policy to promote lending and, ultimately, inflation in the Eurozone. The move sent investors flocking to precious metals like gold and silver.
That’s because precious metals tend to move in tandem with inflation. As the value of a currency decreases - which is an effect of inflation - the price of precious metals increases. A declining value of a currency means that it takes more of that currency to purchase an ounce of the metal………………………………………..Full Article: Source

Time For Equities To Crash And Precious Metals To Spike?

Posted on 25 June 2014 by VRS  |  Email |Print

There is a distinct possibility that equities could move down into an intermediate bottom and at roughly the same time gold could bottom. Equities have rocketed in the last 3 years while precious metals have plummeted.
We are quickly approaching an inflection point in the markets. Soon, market forces will overpower government and central bank interventions………………………………………..Full Article: Source

Have These Gold Mining Stocks Finally Hit Bottom

Posted on 18 June 2014 by VRS  |  Email |Print

As gold prices remain soft, gold miners’ shares find themselves on shaky ground. However, it looks like for some of them, the worst could be over. IAMGOLD , Eldorado Gold , and Kinross Gold were under serious pressure last year, but so far this year their shares have stood firm. Does this mean that these miners have reached their bottoms?
IAMGOLD: relying on the price of gold: Despite cost-cutting efforts, IAMGOLD remains a relatively high-cost producer. The company’s all-in sustaining costs (AISC) dropped from $1,290 per ounce of gold in the first quarter of 2013 to $1,198 in the first quarter of 2014, but remain close to the current gold price. This year, IAMGOLD targets AISC of $1,150-$1,250 per ounce of gold………………………………………..Full Article: Source

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Bank cutting commodities trade severs link with equitiess

Posted on 25 April 2014 by VRS  |  Email |Print

Banks’ pullback from commodities trading is weakening the link between raw materials and equities and helping to re-establish supply and demand as the main factor in setting prices, United Nations researchers say.
As Barclays Plc, JPMorgan Chase & Co. and Morgan Stanley leave parts of the business, prices of commodities are moving more independently of stocks. The correlation between U.S. equities and corn, cattle and wheat fell to less than 0.05 in January, compared with almost 0.3 in 2008, an analysis by David Bicchetti and Nicolas Maystre, economic affairs officers at the UN Conference on Trade and Development in Geneva, shows………………………………………..Full Article: Source

Louis Dreyfus Commodities gets ‘IPO-ready’

Posted on 02 April 2014 by VRS  |  Email |Print

Louis Dreyfus Commodities is taking steps to ensure that it is ready for either a stock market listing or a partial sale to a strategic investor, as one of the world’s largest food trading houses navigates a fast changing landscape for natural resources.
In a rare interview, Margarita Louis-Dreyfus, majority shareholder, said the 163-year-old trading house did not want to abandon its privately owned status and had no immediate plans for an initial public offering, but had to be ready for every eventuality………………………….Full Article: Source

Why commodities are sending the stock market mixed signals

Posted on 28 March 2014 by VRS  |  Email |Print

Early Thursday, the Dow Jones Industrials managed to claw back some of the ground it lost yesterday, with the average rising 17 points as of 10:45 a.m. EDT. Mixed economic data set the stage for a choppy morning for the market, with new claims for unemployment benefits falling to their lowest levels of the year, but a 0.8% drop in pending home sales contracts in February offseting some of the enthusiasm.
From a longer-term perspective, though, the Dow Jones Industrials haven’t yet demonstrated their ability to break out to new highs, and investors are looking to other markets for clues on where the Dow and the broader stock market could go next………………………………Full Article: Source

US stocks decline along with commodities as China weighs

Posted on 12 March 2014 by VRS  |  Email |Print

U.S. stocks declined on Tuesday, with the S&P 500 retreating from its record, as news from China hit commodity prices, concern about Ukraine lingered and investors awaited signals on the direction of the economy.
“Equities are in a holding pattern around all-time highs, and are likely to be so for the next couple of weeks as investors wait for some clarity on the economy. We need another round of economic readings to get a better measure on the pace of economic growth,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management………………………………………..Full Article: Source

Gunzberg: Commodities to upstage stocks in 2014

Posted on 12 March 2014 by VRS  |  Email |Print

Commodities markets have been major underdogs relative to record-breaking U.S. equities for much of the past six years. But the tides are now turning, S&P Dow’s Vice President Jodie Gunzberg says.
Amid supply shocks around the globe, tapering of quantitative easing in the U.S. and a rising-interest-rate outlook, commodities from corn to hogs to oil seem bound to shine in 2014, leaving equities in their shadows, Gunzberg said………………………………………..Full Article: Source

Commodities could be better value than stocks right now

Posted on 06 March 2014 by VRS  |  Email |Print

U.S. equities are flat on Wednesday following Tuesday’s big gains. Mark Newton, chief market technician at Greywolf Equities, told TheStreet’s Debra Borchardt that commodities might be the better place for investors to be.
Newton said he prefers to use the Continuous Commodity Index (CCI) over the Jefferies Commodities Index ETF (CRB), since the latter is too heavily weighted toward energy. The CCI has retraced approximately one-third of 2011’s big move lower and has really started to break out over the past several weeks, he said………………………………………..Full Article: Source

Commodities and yields recoupling with stocks

Posted on 24 February 2014 by VRS  |  Email |Print

The coupling of commodities and yields with stocks ended in the middle of last year but created problems for funds that persisted in betting on such correlations for longer. Commodities started to recouple with the stock market in the third quarter of last year and yields followed last month.
Is the new recoupling a sign of a replay of the 2012 good times in the stock market or the result of wishful investor thinking? Does this matter anyway?……………………………………….Full Article: Source

Gold stock breakout targets new levels

Posted on 17 February 2014 by VRS  |  Email |Print

Gold stocks just surged to a major technical breakout, a very bullish omen. Investors are actually starting to redeploy capital in this battered sector, catapulting gold stocks into the early lead as 2014’s best performers!
This year is shaping up to be the polar opposite of last year’s epic carnage, with gold stocks mean reverting back up to fundamentally-reasonable levels. The vast majority of the buying is still yet to come. Exiting last year, gold stocks were inarguably the most hated sector in all the stock markets………………………………………..Full Article: Source

3 companies set to win from rising gold prices

Posted on 17 February 2014 by VRS  |  Email |Print

Despite bearish analyst forecasts in late 2013 for the year ahead, the price of gold has held its ground or risen so far in 2014. Since January the precious metal has pushed up 7.6% to US$1,318 per ounce. This has been put down to everything from weak jobs in the US, strong growth in China and even, bizarrely, the weather.
Regardless, if the price of gold continues its recovery there could be some big money to be made on gold mining companies which still have a long way to go to recover themselves. The following three companies could be in prime positions to profit:……………………………………….Full Article: Source

Are commodity stocks poised for a rebound?

Posted on 24 January 2014 by VRS  |  Email |Print

Like a lot of investors, Ben Willis spent much of the last two years closely watching the dramatic drop in commodity prices. Since April 2011 the MSCI Commodity Producers Index, which tracks a number of global commodity companies, fell 22 percent, while metals such as copper, aluminum and nickel plummeted by more than 30 percent.
While many people have dumped their materials stocks during the free fall, this Bristol-based investment manager was waiting for the right moment to jump in. “I had to see a catalyst that would turn these stocks around,” said Willis, head of research at Whitechurch Securities Ltd………………………………………..Full Article: Source

What could go wrong for stocks — and right for gold — in 2014?

Posted on 24 January 2014 by VRS  |  Email |Print

Are investors too bullish on the stock market’s prospects for 2014 and too bearish for gold’s? It would certainly seem that way based on the near unanimity of analyst consensus. Most institutional analysts have published bullish forecasts for equities in 2014 and a bearish, or at least cautionary, outlook for gold. The favorable forecast for stocks and bearish gold outlook is based on the assumption that deflation remains at bay for the coming year.
But what if analyst expectations are disappointed and deflation rears its ugly head? That is precisely the scenario we’ll discuss here. For if deflation returns at some point this year it would easily upset the status quo for both asset categories………………………………………..Full Article: Source

Oil prices are at a tipping point, so buy natural gas

Posted on 20 January 2014 by VRS  |  Email |Print

The energy sector broadly outperformed in Wednesday trade, led higher by a substantial rally in WTI crude oil futures, which spiked 1.90% during the session.
WTI was higher early yesterday on short covering ahead of the inventory report, but the rally expanded after the release of a better-than-expected Empire State manufacturing survey. Strength in the survey boosted industrial commodities, while also sending the dollar higher………………………………………..Full Article: Source

Afraid of stocks? Commodities are one place you can look

Posted on 17 January 2014 by VRS  |  Email |Print

With the growing number of calls for a significant stock market pullback ahead, one area likely to start seeing investor inflows is commodities. The space has suffered a rough couple of years as the so-called Commodity Supercycle broke down.
Strong supplies of various crops, wobbly global economic growth and a meltdown in gold and other metals caused prices to sag and money to flow to equities. But the damage may have been done, setting the stage for a rebound. Experts see opportunities in metals outside gold as well as selected agricultural commodities………………………………………..Full Article: Source

ICE looks to sell part of Euronext ahead of IPO

Posted on 07 January 2014 by VRS  |  Email |Print

IntercontinentalExchange is looking to sell at least a quarter of Euronext, the European stock exchange group, ahead of an initial public offering that is expected this year, according to people familiar with the situation.
A sale would allow the US derivatives exchange group a way to circumvent regulatory requirements that it hold a long-term stake in Euronext, which operates the main stock exchanges in Paris, Amsterdam, Lisbon and Madrid………………………………………..Full Article: Source

Should you invest in stocks or commodities in 2014?

Posted on 30 December 2013 by VRS  |  Email |Print

It’s the dawn of a new year and investors are facing an array of fresh challenges. One of the intriguing investment parlor games is to contemplate whether stocks or commodities loom as the vehicles offering the best returns.
Stocks enjoyed a spectacular showing in 2013. But investors may fret that it is unrealistic to expect continued glowing returns from the Standard & Poor’s 500 in 2014 and thus turn to commodities………………………………………..Full Article: Source

Gold will continue to underperform equities over the next 2 years

Posted on 30 December 2013 by VRS  |  Email |Print

Gold is the investment asset class which provides a hedge against inflation and better returns during recession when currencies lose their value drastically. The world is now coming out of tough times and major economies like the US have started showing good economic numbers which are fundamentally bearish for gold.
Against this backdrop gold may not give better return than equities in coming 1-2 years. Nevertheless, from a long-term perspective bet 5-10 years investors will definitely get positive returns not less than inflation rate………………………………………..Full Article: Source

My 2014 outlook for oil & gas stocks

Posted on 19 December 2013 by VRS  |  Email |Print

In part one I wrote about the 3 oil patch sub-sectors I’m most bullish on, and how I’m trading them: refineries, oilfield services, and heavy oil producers. Today, my outlook for the remaining oil and gas sub-sectors—from best to worst…
Here’s the dilemma with them: improvements in fracking are enabling a lot more production—so much so it’s dropping the light oil price. But the technology is also dropping the break-even price of said oil—so I don’t think cash flows will drop as much as people think. At first. ;-) — let’s see just how far the oil price drops………………………………………..Full Article: Source

Will gold stocks shine in 2014?

Posted on 19 December 2013 by VRS  |  Email |Print

Calendar year 2013 will be a year many gold bugs would rather forget. After a sustained multi-year rally, the gold price touched a 52-week high of US$1703/oz near the start of 2013. Since then it has been in a consistent downtrend with the precious metal currently trading just US$50 above its year low of US$1180/oz.
The decline has certainly unwound much of the exuberance that had been on display in the gold sector, with the US$1180/oz level reducing the metal back to where it traded in the aftermath of the Global Financial Crisis. While the decline in the gold price has been dramatic, the effect on gold producers and explorers has been nothing short of horrifying………………………………………..Full Article: Source

2014: Battleground year for stocks vs. commodities

Posted on 16 December 2013 by VRS  |  Email |Print

U.S. equities outperformed commodities this year by a long shot, but commodities have a good chance to regain investor favor in 2014 after three consecutive years of declines. “Something has got to give in 2014,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago.
As the investing game draws to an end for the year, the near final score is: commodities down roughly 9%, based on the Dow Jones-UBS Commodity Index. The Dow Jones-UBS Commodity Index Total Return Exchange-Traded Note DJP +0.05% has lost 10% year to date. The S&P 500 Index, on the other hand, has surged 25%, on track for its best year since 2003………………………………………..Full Article: Source

This commodity the next big trade in energy stocks?

Posted on 29 November 2013 by VRS  |  Email |Print

In many cases, companies in transformative industries can, at times, offer significant value—and natural gas is no exception. At this time, I see a large amount of potential upside in this commodity. While there has been a lot of hype around electric vehicles and other alternative energy sources, I believe natural gas will play an increasingly larger role in our economy.
There are several reasons why I believe this, including the fact that the fossil fuel is quite abundant in North America; it burns clean, so it’s better for the environment than coal or oil; and it’s relatively affordable………………………………………..Full Article: Source

Oil stocks vs. oil ETF – which is a better buy?

Posted on 15 November 2013 by VRS  |  Email |Print

Oil stocks have become commonplace in many long-term portfolios, but an oil ETF is another way to bet on the price of crude. Why do so many investors have their eyes on oil stocks? Because global energy demoil stocks oil etfs xom cvxand is skyrocketing as our world’s population continues to grow and modernize.
In fact, integrated oil stock Exxon Mobil (XOM) predicts that global demand for energy will increase roughly 30% by 2040. The bulk of that gain will be led by economic growth from non-OECD countries and developing nations………………………………………..Full Article: Source

Why crude tumbled on rising inventories, negative for oil stocks

Posted on 06 November 2013 by VRS  |  Email |Print

Every week, the U.S. Department of Energy (DOE) reports figures on crude inventories, or the amount of crude oil stored in facilities across the United States. Market participants pay attention to these figures, as they can indicate supply and demand trends.
If the increase in crude inventories is more than expected, it implies either greater supply or weaker demand and is bearish for crude oil prices. If the increase in crude inventories is less than expected, it implies either weaker supply or greater demand and is bullish for crude oil prices………………………………………..Full Article: Source

Gold mining shares won’t be attractive until gold price climbs significantly

Posted on 06 November 2013 by VRS  |  Email |Print

Investors in gold mining companies should resist the temptation to jump back into the market just because companies are cutting budgets and delaying projects, an investment analyst said Tuesday.
Chris Gaffney, a senior market strategist for EverBank Financial Corp. who specializes in precious metals, said the key to buying gold mining stocks is the price of the commodity, not changes in company budgets………………………………………..Full Article: Source

Has relationship between gold stocks and managers changed?

Posted on 05 November 2013 by VRS  |  Email |Print

Managers backing miners bears hallmarks of a classic contrarian trade that investors should be wary of missing. Some of the country’s leading fund buyers are backing gold miners and commodity-related equities to bounce back from heavy losses – and it bears all the hallmarks of a classic contrarian trade that investors should be wary of missing out on.
Multi-managers including Jupiter’s John Chatfeild-Roberts and Cazenove’s Marcus Brookes have bought into gold equities in the past few months, primarily backing BlackRock’s star commodities manager Evy Hambro and his £1.5bn BlackRock Gold & General fund………………………………………..Full Article: Source

Why the gold price and stock markets are disconnecting

Posted on 29 October 2013 by VRS  |  Email |Print

The gold price consolidated recent gains on Monday holding firm above the key $1,350 an ounce level it scaled last week to reach a five-week high. In late afternoon trade on the Comex market in New York December gold futures changed hands at $1,353.60, a slight gain on Monday’s close, but off its highs for the day of $1,362.
The price of gold has rallied sharply from the intra-day low of $1,182.60 an ounce hit on June 28, but remains down 19% for the year………………………………………..Full Article: Source

Worst stocks poised to reverse with commodity profits rising 18pct

Posted on 07 October 2013 by VRS  |  Email |Print

Commodity stocks, lagging behind the Standard & Poor’s 500 Index by the most in 15 years, are poised to rally as analysts estimate profits will rise almost twice as fast as the rest of U.S. industry in 2014.
Mining companies and chemical producers in the S&P 500 will increase earnings by 18 percent in 2014, compared with a 11 percent gain for the equity gauge, according to the average of more than 9,000 estimates compiled by Bloomberg………………………………………..Full Article: Source

Warren Buffett’s commodity stock picks

Posted on 27 September 2013 by VRS  |  Email |Print

Warren Buffett — the Oracle of Omaha — is one of the world’s most renowned investors, heralded for his simple yet effective valuation methods. As such, followers of the legendary investor pay close attention when Buffett places big bets, and they hope that by following his stock picks, they will cash in on Buffett’s guru-like instincts.
In the commodity space, however, Buffett has been quite vocal about his aversion to certain commodities — namely gold . However, Buffett does have meaningful exposure to commodity producers that are involved in a wide array of industries, including oil and gas, solar power, and agriculture………………………………………..Full Article: Source

Are gold equities worth their weight?

Posted on 26 September 2013 by VRS  |  Email |Print

If investors can stomach the volatility, stronger management could mark gold equities as an opportunity. Gold has had a torrid time of it so far this year. Its price fell to $1,191.21 an ounce in June, the lowest price since August 2010 and representing the worst quarter for gold since 1968 but since then has recovered somewhat while remaining volatile.
But despite its volatility, there are some fund managers who believe the commodity, and particularly gold equities, represent a good opportunity………………………………………..Full Article: Source

Mining shares seen outperforming gold in rising price environment

Posted on 26 September 2013 by VRS  |  Email |Print

Gold-mining stocks are likely to outperform gold itself if the metal returns to a rising price environment, said fund managers and mining analysts attending the Denver Gold Forum.
Historically, this has been the case. But there was a spell during gold’s long bull run when the metal was outpacing mining shares………………………………………..Full Article: Source

Equities set to keep edge over commodities-analysts

Posted on 25 September 2013 by VRS  |  Email |Print

Investment flows into commodities are improving, but broad sector indexes are unlikely to consistently outperform equities for at least another year, until global growth gathers more momentum, analysts and fund managers say.
Strong commodity gains in August together with a breakdown in correlations between commodities and other asset classes like equities is helping to spark interest from investors. “The view on commodities was pessimistic at best a few months ago. That seems to have changed, especially after August,” David Hemming, portfolio manager in commodities at Hermes, told a recent conference………………………………………..Full Article: Source

Precious metals or mining stocks? – Rick Rule

Posted on 17 September 2013 by VRS  |  Email |Print

Late summer saw, to the relief of some investors, some price improvements in precious metals and precious metals stocks. We asked Sprott USA Holdings Chairman Rick Rule if he thought this might indicate that we’ve seen the bottom in this sector.
“There’s a key element still missing from the picture,” Rick stated in a recent update to investors. “In past bear markets in natural resources, we witnessed a wave of capitulation selling that marked the end of the bear market. That capitulation allowed the next bull market phase to begin. And we haven’t seen that kind of capitulation occur in this market.”……………………………………….Full Article: Source

Heavy selling of gold stocks may point to further declines for bullion

Posted on 11 September 2013 by VRS  |  Email |Print

The gold price fell more than $20 to a near one-month low of $1,362 on Tuesday after a possible deal averting US airstrikes on Syria emerged and news that Indian gold imports fell by 70% in August hurt sentiment.
The gold price seemed to have turned a corner in August fighting back from near 3-year lows of $1,200 hit at the end of June, but it failed to decisively clear the $1,400 level and the rally has been steadily losing steam this month………………………………………..Full Article: Source

Commodity stocks may rebound, but not for the reason you think

Posted on 26 July 2013 by VRS  |  Email |Print

Global natural-resource stocks have sunk to the bottom of the barrel in an otherwise bullish first half of the year for equity markets. The Morgan Stanley Commodity Related Equity Index dropped 3.7 percent in the six months ended June, compared with a gain of 13.8 percent for the benchmark S&P 500 Index.
And that wasn’t just a recent phenomenon: As shown in the chart below, commodity stocks have trailed the S&P 500 for over two years — and by a whopping 36.5 percent………………………………………..Full Article: Source

Hedging stocks with commodities seen as flawed

Posted on 26 July 2013 by VRS  |  Email |Print

Commodities track stocks too closely to make them suitable for equity investors seeking to minimize risk, according to Marco J. Lombardi, an economist at the Bank for International Settlements.
“The common lore that commodities should serve as a hedge does not seem to be solidly grounded,” Lombardi and Francesco Ravazzolo, an economist at the Norwegian central bank, wrote in a paper two weeks ago. The research was published by the BIS, which keeps records for the world’s central banks………………………………………..Full Article: Source

Commodity slump hits mining IPOs in Hong Kong

Posted on 24 July 2013 by VRS  |  Email |Print

Hong Kong became the go-to listing destination for resources companies in recent years, but a slide in commodity prices and China’s economic slowdown mean the city faces challenges in attracting further listings by foreign companies.
Commodity prices started rising more than a decade ago, and the sector became the darling of investors. In a bid to attract non-Chinese miners, which have typically listed in London or Toronto, the Hong Kong stock exchange eased its listing requirements for the sector three years ago………………………………………..Full Article: Source

Oppenheimer says it is time to buy out-of-favor commodity stocks

Posted on 23 July 2013 by VRS  |  Email |Print

For investors with the view that we have seen the worst of the correction in commodity stocks for 2013, or will soon shortly, the research team at Oppenheimer believes increased exposure to the commodity-sensitive sectors of energy and materials is the way to go.
They also hold a further bias toward materials, given its leverage to any signs of recovery in global growth and its recent historical tendency to lead over the ensuing three- and six-month periods following a corrective trough in equities………………………………………..Full Article: Source

Gold mining stocks take a beating as price tumbles

Posted on 18 July 2013 by VRS  |  Email |Print

Think gold has been a bad investment this year? Try gold miners. The FTSE Gold Mines index of gold equities has tumbled 46 per cent since the start of the year. Some shares have fallen even more: London-listed African Barrick Gold is down 76 per cent.
“The sentiment is terrible – worse even than the sentiment towards gold,” says Patrick Chidley, analyst at HSBC………………………………………..Full Article: Source

Time to move on from commodities to global stock picking

Posted on 24 June 2013 by VRS  |  Email |Print

Morgan Stanley this week joined a growing list of big investment banks beating a partial retreat from commodities trading. Like Barclays, UBS and Deutsche Bank, it is struggling to make sense of a business where revenues have tumbled since the heyday of the natural resources boom immediately prior to the financial crisis. So is the commodities super-cycle over?
For three reasons, I think the remarkable rally in the prices of energy and metals (although maybe not food which marches to a different beat) may have ground to a halt. If so, this might have big implications for investors………………………………………..Full Article: Source

Goldman sees bull run over as returns trail stocks: Commodities

Posted on 07 June 2013 by VRS  |  Email |Print

Commodities are trailing equities for the longest stretch in almost 15 years as Goldman Sachs Group Inc. and Citigroup Inc. predict the end of the decade-long bull market even as the global economy expands.
The Standard & Poor’s GSCI Spot Index of 24 commodities lagged behind the MSCI All-Country World Index for six months, the longest stretch since 1998. Hedge funds cut combined bullish bets across 18 U.S. raw-material futures by 51 percent from a 16-month high in September and are bearish on six of them. Commodities will return 1.6 percent in a year as losses in agriculture and precious metals diminish gains from energy and industrial metals, Goldman said last month……………………………………Full Article: Source

City AM cuts commodities for equities

Posted on 04 June 2013 by VRS  |  Email |Print

City Asset Management has removed commodity exposure from its model portfolios in favour of international equities and alternative strategies. The group said it had removed its 4 per cent commodity exposure in its unitised model portfolios in April and put the proceeds towards increasing international equities from 12 per cent to 14 per cent, and alternative strategies from 15.5 per cent to 17 per cent.
James Calder, research director at City Asset Management, said he had decided to increase merger arbitrage strategies because they appeared “particularly attractive given the prospect of increased corporate deal activity resulting from the cash-rich nature of many businesses”………………………………………..Full Article: Source

Goldman says commodities, stocks diverge as stockpiles increase

Posted on 16 May 2013 by VRS  |  Email |Print

Goldman Sachs Group Inc. said that returns from commodities have diverged from developed equity markets amid expectations for rising metal stockpiles and energy supplies, maintaining its neutral outlook on raw materials.
Commodity returns as gauged by the Standard & Poor’s GSCI Enhanced index will be 1.6 percent over 12 months, analysts led by Jeffrey Currie wrote in a report dated yesterday. That compares with an earlier estimate for a 2.5 percent return, according to an April 23 report. Goldman is most bearish on agriculture, forecasting a 13 percent loss over 12 months…………………………………….Full Article: Source

That equities/commodities disconnect

Posted on 15 May 2013 by VRS  |  Email |Print

Stocks are up because of rampant QE, which is squeezing investor flows out of bond markets and into equities. And the reason we’ve got rampant QE is the continued lack of near-term economic recovery globally, which is manifestly bad for industrial commodities.
Julian Jessop at Capital Economics notes that industrial metals are particularly sensitive to Chinese growth prospects and it seems noteworthy that Shanghai is one stock market that is not rising at present………………………………………..Full Article: Source

Magic trees: The performance of equities Vs. commodities

Posted on 08 May 2013 by VRS  |  Email |Print

Imagine an island on which magic trees grow. These trees, as it turns out, are exactly like the trees everywhere else, except for three things. First, these trees never die. Second, the trees always grow to exactly 100 feet tall eventually.
And third, to pass time on this boring island, the villagers place bets on which specific trees in a given acre of land (on which all trees were planted at the same time) will grow the fastest over the next 10 years………………………………………..Full Article: Source

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