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Falling Commodity Prices Weigh on Asia Resources Stocks

Posted on 24 May 2016 by VRS  |  Email |Print

Declining commodity prices weighed on Asia’s resource stocks Monday, while the Japanese share market slipped amid a lack of major consensus from the Group of Seven meetings between finance ministers and central bankers.
Energy stocks led losses in much of the region, after crude oil prices fell Friday in the U.S. and continued to slip during Asian trading hours Monday. Tokyo-listed Inpex Corp. finished down 2.2% while Australia’s energy sector was down 2%. Brent crude prices were last down 0.9% at $48.28 a barrel………………………………………..Full Article: Source

India: Coming, new commodity derivative products

Posted on 16 May 2016 by VRS  |  Email |Print

New derivative products in the commodity markets are likely to be launched by the Securities and Exchange Board of India in the coming months. Three sub-working groups of the market regulator are looking at various issues relating to commodity derivatives – polling of prices, option limit and eligibility criteria for commodities to qualify for future trading. The groups are expected to submit their reports shortly.
“Once they submit their report, we will hold a meeting and look at possible options,” said NITI Aayog member Ramesh Chand, who also heads SEBI’s Commodity Market Advisory Committee and is currrently working on the issue………………………………………..Full Article: Source

Commodities ‘humiliated’ while stocks head for record run

Posted on 19 April 2016 by VRS  |  Email |Print

Commodities have had a pretty humbling run recently. In fact, Bank of America Merrill Lynch calculates that long-term returns are now running at the weakest pace since… 1933. Time for the tide to turn? Chief investment strategist Michael Hartnett at the bank writes:
The most bullish argument for commodities today is “humiliation”. Similar to stocks in 2009, the rolling return from commodities is currently at a multi-decade low, indeed the lowest since 1933. And commodity producers and Emerging Markets at least offer the potential for lower rates and higher earnings per share over the medium term. The secular upside for commodities is thus greater than downside. We like gold………………………………………..Full Article: Source

Latin America Is Facing Commodity and Demographic Shocks

Posted on 15 April 2016 by VRS  |  Email |Print

What is far more worrying is that several countries increased fiscal spending in response to the 2009 recession and then failed to reverse the increases as the recession receded. A vast majority of Latin American countries need to trim fiscal spending and undertake fundamental reforms while urging its borrowers not to cut capital investments, according to the Inter-American Development Bank.
The regional economies will remain weak until 2020 unless the countries reform their fiscal policies immediately, the bank said in an annual report released in Bahamas. Weak global growth, a fading demographic boom, lower commodity prices, and deteriorating fiscal positions have hit Latin America hard, plunging countries like Brazil and Venezuela into deep crisis………………………………………..Full Article: Source

A rally in commodities may be a sign that Wall Street hit a bottom

Posted on 09 March 2016 by VRS  |  Email |Print

Have we hit a bottom yet? Wall Street appears to think that a march higher in the commodities sector may be signaling that the worst is over for the market—at least in the near term.
For many investors, plunging commodity prices have been a sign that all isn’t well in the world. Falling commodity prices, specifically crude-oil prices CLJ6, -0.38% can serve as a sign that global growth is in a state of retrenchment. In the case of oil, many believe it is simply a matter of an unrelenting glut………………………………………..Full Article: Source

Dollar softening boosts equities, commodities

Posted on 05 February 2016 by VRS  |  Email |Print

Global equity markets rose on Thursday as diminished expectations of U.S. interest rate hikes this year pushed the dollar lower, which in turned boosted the prices of many commodities.
The dollar fell for a fourth day on the latest batch of soft U.S. data, while comments from a U.S. Federal Reserve policymaker on Wednesday were viewed as a sign further rate hikes could be delayed. Those comments were buttressed on Thursday by Robert Kaplan, the new head of the Dallas Fed, who said the central bank should be “patient” on rate increases………………………………………..Full Article: Source

Emerging Stocks Drop With Commodities as Growth Concern Lingers

Posted on 03 February 2016 by VRS  |  Email |Print

Emerging-market stocks fell the most in a week as oil deepened its decline and concern mounted that the contagion from China’s economic slowdown is spreading. A gauge of developing-nation exchange rates dropped for a second day, led by the Russian ruble.
South African equities slid for a second day as the World Bank said the continent’s second-largest economy is flirting with stagnation. The Ibovespa fell the most since August 2011 as Brazilian commodity exporters including Vale SA slid with raw-material prices………………………………………..Full Article: Source

Oil’s Big Bang: Saudis Mull IPO of World’s Biggest Producer

Posted on 08 January 2016 by VRS  |  Email |Print

Saudi Arabia is considering its own Big Bang. The world biggest crude exporter is considering selling a stake in its state-owned company, which controls more than a tenth of the global oil market.
A potential initial public offering is under review for Saudi Arabian Oil Co., also known as Aramco, Mohammed bin Salman, the kingdom’s deputy crown prince, said in an interview with The Economist. A decision will probably be taken in the next few months, he said, without giving further details………………………………………..Full Article: Source

Copper, Nickel Rebound as China Intervenes in Stock Market

Posted on 06 January 2016 by VRS  |  Email |Print

Copper climbed the most in two weeks and nickel gained after China sought to support its stock market following Monday’s rout that sent metal prices tumbling. State-controlled funds in China bought equities and regulators signaled a selling ban on major investors will remain beyond this week’s expiration date, according to people familiar with the matter.
Most metals traded in London and a gauge of mining shares rose. On Monday, copper fell the most in three weeks, helping take an index of six main contracts on the London Metal Exchange to its biggest slump since September after a plunge in mainland China shares triggered a trading halt……………………………………….Full Article: Source

Miners descend as Chinese factory activity disappoints

Posted on 05 January 2016 by VRS  |  Email |Print

The UK-listed mining sector began 2016 firmly in the red as the price of copper sank to a two-week low, after weak economic data from China triggered fresh concerns about the world’s largest metals consumer. After slumping 24pc last year, three-month copper on the London Metal Exchange tumbled 2.3pc to $4,599, its lowest level since December 18.
Given their reliance on Asian consumption, mining stocks slipped towards the bottom of the blue-chip index after factory activity in China contracted for a 10th consecutive month in December. The Caixin China Manufacturing Purchasing Managers’ Index dipped to 48.2 last month, falling short of expectations that it would hit 49………………………………………..Full Article: Source

Markets likely to return to normalcy in 2016

Posted on 30 December 2015 by VRS  |  Email |Print

Since 2008, stock market behaviour has been affected by unforeseen events, overturning conventional wisdom and reversed the immediate course of investor behaviour. The commodity price collapse and the Chinese yuan devaluation in 2015 is a good example of that. Given such a background, what will 2016 be like? At one level, it could be a return to normal conditions, economy and corporate earnings.
It is too early to talk of a capex revival, but earnings could recover bolstered by low base effect and higher growth; commodity prices could stabilise, having fallen sharply last year. Economic growth could move higher and we are likely to end the year with a far robust economy. But it will still not be close to our expectations leaving some of us disappointed………………………………………..Full Article: Source

Rollercoaster commodities stay in focus for Wall Street

Posted on 10 December 2015 by VRS  |  Email |Print

U.S. stock index futures pointed to a softer open on Wednesday after two days of intense volatility in oil markets, which have rocked commodity and mining stocks and added to the anxiety ahead of the Fed’s meeting next week. Oil could again be volatile, particularly with 10:30 a.m. ET release of petroleum inventory data expected from the Energy Information Administration.
Other data due for release includes wholesale inventories numbers for October due at 10:00 a.m. ET. The Treasury auctions $21 billion in reopened 10-year notes at 1 p.m. ET. Oil prices rose on Wednesday after American Petroleum Institute data, released after Tuesday’s market close, showed a surprise drawdown in supply, offering the market support amid an ongoing supply glut………………………………………..Full Article: Source

Global stocks drop on commodities rout

Posted on 09 December 2015 by VRS  |  Email |Print

The global commodities rout throttled world stock markets Tuesday, with mining companies retreating on news of massive layoffs at mining giant Anglo American and oil prices hitting fresh multi-year lows.
A global sell-off began in Asia following weak Chinese trade data and deepened after Anglo American unveiled what it billed as a “radical” restructuring in response to weak commodity prices. Equity markets in Paris, London and Frankfurt lost between 1.4 and 2.0 percent, while the broad-based S&P 500 in the US shed 0.7 percent. In foreign exchange activity, the euro edged higher against the dollar………………………………………..Full Article: Source

Investors brace for more losses as commodities crunched

Posted on 09 December 2015 by VRS  |  Email |Print

BHP shares have dropped below $17 each and South32 under $1 for the first time after commodities were crunched again overnight and mining giant Anglo American cancelled its dividend.
Brent oil dipped below $US40 a barrel for the first time since early 2009, before recovering, while iron ore continued its descent, with the Qingdao benchmark shedding another US41¢, or 1.1 per cent, to $US38.65 a tonne. On the London Stock Exchange, investors dumped Rio Tinto, driving the price of its shares down 8.4 per cent, while BHP Billiton dropped a further 5.5 per cent………………………………………..Full Article: Source

Stronger commodities to help Asian equities open up

Posted on 25 November 2015 by VRS  |  Email |Print

Asian equity markets are expected to open in the green on Wednesday, after Wall Street eked out gains on the back of an uptick in commodity prices. U.S. markets closed mostly higher on Tuesday after oil prices and energy stocks jumped, reversing an earlier decline on news of a downed Russian jet near the Syrian border. The downing was read as a heightening of tensions in the Middle East, which helped support the price of oil.
A Russian warplane was shot down near the Syrian border on Tuesday after Turkey claimed it entered Turkish airspace. The state-run Turkish news service Anadolu Agency said the warplane was engaged by two Turkish F16 jets………………………………………..Full Article: Source

10 high yield stocks safe from the commodities rout

Posted on 30 October 2015 by VRS  |  Email |Print

Miners and oil majors are offering high, but vulnerable yields. Here are some alternatives. Finding high-yielding stocks couldn’t be easier: simply buy a large-cap mining or oil stock. But as Glencore’s suspension of its dividend last month showed, these yields can be vulnerable, and more cuts are likely to come.
So are there any high-yielding stocks worth owning? Yes. Here, Citywire highlights 10 companies - from giants to minnows - offering at least 25% more than the FTSE All-Share’s current yield of 3.6%. All are held by Citywire-rated managers, and none are commodity stocks………………………………………..Full Article: Source

US and European stocks ease as commodities slip

Posted on 21 October 2015 by VRS  |  Email |Print

Stocks were slightly softer as the euro and Bund yields rose after improving bank lending in the eurozone reduced expectations for more stimulus from the European Central Bank. The FTSE Eurofirst 300, a pan-European equity gauge, fell 0.5 per cent, also dragged lower by resources groups as the prices of base metals and oil relapse. The FTSE Asia Pacific index shed just 0.1 per cent.
Both regions have received little impetus from the US, where the S&P 500 was flat overnight and briefly flirted with two-month highs before slipping 2.89 points to 2,030.77 by the close. That leaves the Wall Street benchmark, which tends to determine the global mood, only about 5 per cent below its record hit in May, having bounced 8.7 per cent from its August lows………………………………………..Full Article: Source

Why are commodity markets behaving like stock markets?

Posted on 21 October 2015 by VRS  |  Email |Print

Ten years ago, a course on commodity markets would teach students that commodity returns are uncorrelated with the returns of other financial assets. Commodities were praised as excellent portfolio diversifiers, providing financial protection when it is needed most. Since the early 2000s, however, the behaviour of commodity prices has changed in fundamental ways.
Popular investment commodities such as crude oil or gold have shown large price swings that are difficult to explain by economic fundamentals alone. Commodity returns started to co-move with the general stock market. More generally, commodities started to behave no longer like physical assets but more like financial assets. This phenomenon is actively debated in the academic literature as the “financialisation of commodity markets”………………………………………..Full Article: Source

Turning Tide: Morgan Stanley’s Bullish on Miners

Posted on 08 October 2015 by VRS  |  Email |Print

Metal and mining stocks have had a tumultuous year, but Morgan Stanley says the tide is turning and the worst may be over. In a note Wednesday morning, analysts at the bank slapped an “attractive” label on the sector and said valuations are at historically attractive levels.
They raised their recommendation for Rio Tinto and BHP Billiton to “overweight” from “equal weight” and for Anglo American to “equal weight” from “underweight.” They said they see commodity prices rising 19% by 2017, adding this “would be a sharp reversal from the experience in the last 18 months.” Equities exposed to the sector, they said, will likely outperform………………………………………..Full Article: Source

Credit, Commodities and Currencies Weigh on Stock Markets

Posted on 01 October 2015 by VRS  |  Email |Print

Call it a triple-C market—that is, one dominated by credit, commodities and currencies. A triple-C rating describes a speculative credit well down on the quality scale. In recent days, the market increasingly is looking askance at borrowers of lesser quality, especially those related to commodities.
That reduced esteem for lower-quality credits is hitting the equity market for the simple reason is that stocks never have been so dependent on borrowed money. Nor, for that matter, have commodities. The producers of metals, energy and agricultural goods went heavily into hock to expand production. Cheap credit funded the expansion of supplies not only of energy products but also metals that boomed in the so-called commodity super cycle………………………………………..Full Article: Source

Bad quarter for stocks; dire one for commodities

Posted on 01 October 2015 by VRS  |  Email |Print

The third quarter has been a bad one for global markets, with a rout in commodities putting the asset class among the hardest hit by China slowdown fears and U.S. interest rate uncertainty. Copper prices plunged to a six-year low earlier this week, while Brent crude oil prices were on course for a 23 percent fall during the period.
“We’ve pushed raw materials down so far, we must be getting to the point where they start to base out,” Marc Ostwald, a strategist at ADM Investor Services, told CNBC……………………………………….Full Article: Source

World stocks hit two-year lows as commodities stay pressured

Posted on 30 September 2015 by VRS  |  Email |Print

Global stocks slid to their lowest in more than two years on Tuesday as raw materials prices and emerging markets stayed under pressure. Commodity prices edged up but held near multi-year lows on concern over an economic slowdown in major consumer China.
Mining and trading giant Glencore, whose shares fell by almost a third on Monday on investor concern over its debt levels, eked out gains of 4 percent in London but only after its Hong Kong-listed shares fell 29 percent. Asian commodity merchant Noble lost 11 percent, having at one point in the session fallen by 15 percent to levels last seen in October 2008………………………………………..Full Article: Source

World Markets Drop as Commodities Tumble

Posted on 24 September 2015 by VRS  |  Email |Print

Tumbling commodities prices and worries about China’s economy pulled stocks sharply lower on Tuesday, while bond yields declined and the dollar rose to a two-week high on bets US officials will soon hike interest rates.
Wall Street losses hovered for much of the trading day around 2 per cent on selling driven by falls in oil and copper before easing. European shares were also stung by the commodities sell-off, with the pan-European FTSEurofirst 300 stocks index finishing down 3.3 per cent………………………………………..Full Article: Source

Global equities drop as commodities tumble, dollar up

Posted on 23 September 2015 by VRS  |  Email |Print

Tumbling commodities prices and worries about China’s economy pulled stocks sharply lower on Tuesday, while bond yields declined and the dollar rose to a two-week high on bets U.S. officials will soon hike interest rates. Wall Street losses hovered for much of the trading day around 2 percent on selling driven by falls in oil and copper before easing.
European shares were also stung by the commodities sell-off, with the pan-European FTSEurofirst 300 stocks index .FTEU3 finishing down 3.3 percent. “Investors are nervous because there is a sense that the Fed knows more than it is letting on regarding the health of the global economy,” said Art Hogan, chief market strategist at Wunderlich Securities in New York………………………………………..Full Article: Source

Wall Street drops as commodities weigh

Posted on 23 September 2015 by VRS  |  Email |Print

US stocks dropped on Tuesday as a selloff in commodities dragged down materials shares and Volkswagen suppliers’ shares dropped following the German carmaker’s emissions scandal. S&P materials, down 1.8 per cent, led the decline for the S&P 500, but the selloff was broad-based, with all 10 major sectors lower.
More worries about slower growth in China pushed commodities to two-week lows, with copper prices and industrial metals leading losses. US crude oil also settled lower. Shares of Volkswagen suppliers BorgWarner, Honeywell and Delphi Automotive fell after the German carmaker admitted to cheating on vehicle emission tests………………………………………..Full Article: Source

Miners getting hammered as Credit Suisse downgrades sector

Posted on 23 September 2015 by VRS  |  Email |Print

Mining stocks were getting routed on Tuesday, with a key commodities index dropping to its lowest level in about a month. A rout in the mining sector comes as Credit Suisse downgraded the sector and cut its commodity-price forecasts on the back of growing concerns over a demand slowdown from China.
The Bloomberg Commodity Index BCOM, -0.07% was trading at 87.33, its lowest level since late August and the index has lost more than 16% year to date. Shares of mining companies, specifically metals, have also seen hefty year-to-date declines………………………………………..Full Article: Source

Hedge Funds Ramp Up Volatility Bets to Record Levels

Posted on 17 September 2015 by VRS  |  Email |Print

Bets on higher stock-market volatility are at a record high, signaling increasing concern about the outlook for U.S. shares. Wagers by hedge funds and other speculative investors that futures tied to the CBOE Volatility Index will rise outstripped the number of bets on a falling VIX by 37,925 contracts as of Sept. 8.
That’s the biggest net bullish position on record, according to Schaeffer’s Investment Research’s analysis of data from the U.S. Commodity Futures Trading Commission going back to 2005. A bullish bet on VIX futures signifies a belief that investors will be rushing for protection against market downdrafts. The VIX, the market’s “fear gauge,” is based on the prices of S&P 500 options, which tend to rise as stock prices decline………………………………………..Full Article: Source

Are Depressed Gold Prices an Opportunity in Gold Stocks?

Posted on 01 September 2015 by VRS  |  Email |Print

The volatile trading over the past two weeks claimed many victims, but perhaps the most surprising of which was gold. In theory, gold prices should rise in times of fear and uncertainty, as gold is long considered an unofficial barometer of economic health. And the current dynamics are chock full of fear and uncertainty.
Yet the traditional safe-haven asset was cut down last week, losing 2% of value since Aug. 24 and causing gold stocks and gold miners to tumble as well. The precious metals selloff couldn’t have come at a worse time. Prior to the recent series of red ink, gold prices skyrocketed nearly 7% for the month of August — on pace for the best monthly performance in years………………………………………..Full Article: Source

Buy low, sell high…but stay away from commodities

Posted on 26 August 2015 by VRS  |  Email |Print

The global stock rout may have claimed some victims this week, with heavy selling sending the S&P 500 into correction territory, but equity markets can still offer returns for investors. The definition of “correction territory” is when you see a downward move from a recent high of 10 percent or more.
The definition of “bear market territory” is when you have a 20 percent move down over the course of at least 2 months. Down 17 percent since its recent high in April, the broad-based European Stoxx 600 index is now officially in “correction territory”……………………………………….Full Article: Source

Wary investors seek other havens over gold amid China market rout

Posted on 26 August 2015 by VRS  |  Email |Print

Gold has failed to rally in the face of China’s stock market crisis as investors, scorched by a brutal end to the market’s 12-year bull run, chose cash and bonds for safety over bullion while they seek clarity on the timing of a U.S. rate increase. While at first glance, the failure of a “haven” asset to respond may seem odd, this behaviour is by no means unusual.
As a broad rule, bullion tends to benefit from stock market weakness as an alternative asset, but previous equity crashes show the initial price response can be to fall. “In 2008, when Lehman Brothers collapsed, we saw a two-week decline in gold prices, despite having a perfect storm for gold,” LBBW analyst Thorsten Proettel said………………………………………..Full Article: Source

Commodity Rout Erases $2 Trillion From Stock Values

Posted on 21 August 2015 by VRS  |  Email |Print

Prices have plunged after years of overinvestment led to a supply glut at the same time that economic growth is slowing in China. The value that commodity producers have lost in the past year almost equals India’s entire economy.
Slumping prices for raw materials have wiped out $2.05 trillion from the shares of mining and oil companies since the middle of last year, data compiled by Bloomberg show. That compares with India’s $2.07 trillion gross domestic product………………………………………..Full Article: Source

Here’s what could happen to stocks if commodities rebound

Posted on 21 August 2015 by VRS  |  Email |Print

Today is working up to be anything but the lazy, hazy summer day for trading you might expect. Let’s start with the nation that inspired “Borat.” Kazakhstan’s official currency, the tenge, took a sharp hit after the government moved it into free float. The Asian nation exports oil. Enough said.
And the slick stuff was getting crushed earlier, in the wake of gluttish inventory data. “The bias is lower. The only bulls left are bull ants. They are small,” Richard Hastings, strategist at Global Hunter Securities, said yesterday as oil sank 4%. Brace for a much bigger drop, say some analysts………………………………………..Full Article: Source

Glencore first-half profit tumbles amid commodities rout

Posted on 20 August 2015 by VRS  |  Email |Print

Shares in Glencore, the FTSE-100 miner and commodities trader, have slumped to a record low after tumbling prices for coal and metals linked to slowing Chinese demand hit first-half profits.
Glencore closed down just under 10% at 159p, far below its 2011 float price of 530p, as it revealed a slump in earnings. In the first six months of 2015, adjusted earnings before interest, tax and other items fell 29% from a year earlier to $4.6bn (£2.9bn) as the price of aluminium, nickel and other raw materials fell. The company’s net income excluding significant items dropped by 56% to $882m………………………………………..Full Article: Source

Fund managers offload commodity stocks amid fears of Chinese recession

Posted on 19 August 2015 by VRS  |  Email |Print

Miners were hit as copper priced edged back towards six-year lows, as renewed fears over China rattled fund managers. On the same day that copper prices dropped back towards six-year lows, weighing on the mining-heavy FTSE 100, a closely-watched survey of fund managers around the world showed investors have piled out of energy and commodities stocks amid renewed fears over China.
Two-thirds of the 202 investors polled by Bank of America Merrill Lynch earlier this month said a Chinese recession and an emerging markets debt crisis are the greatest risks to global markets………………………………………..Full Article: Source

Stock Market’s Catch Up To Commodities Raises Volatility Question

Posted on 11 August 2015 by VRS  |  Email |Print

U.S. stock indexes positioned for a mild Monday bounce but did little to shake Wall Street from its cautious posture. The nagging issue of a sky-high dollar’s drag on multinational companies’ earnings prospects and a broad commodities slump continue to weigh on stock sentiment, at least sort of.
These lingering issues could factor into trading this week and are likely on the Federal Reserve’s mind as it mulls flipping the switch to higher interest rates. The broader stock market’s resiliency in the face of headwinds raises a new dilemma, at least according to some observers. Valuations, especially those fed by share buybacks, are stretched. The big worry? Wall Street may be getting pretty comfy propped up by buybacks………………………………………..Full Article: Source

Commodities point to a stock market correction: Expert

Posted on 06 August 2015 by VRS  |  Email |Print

The bad news for commodities could be spreading. As gold, oil, copper and other commodities tumble to multiyear lows, one expert says the turmoil is far from over. In fact, he said the collapse could mean that a full-blown market correction is just around the corner.
“We’re looking at real weakness in the stock market here in the U.S.,” Andrew Hecht said Tuesday on CNBC’s “Futures Now.” “We’ve had a really good time in that market, and I think it’s overdue for a correction.” Hecht, author of “How to Make Money with Commodities,” said he’s watching three commodities markets in particular: copper, oil and lumber. Hecht said copper is especially signaling a global slowdown, most notably in China………………………………………..Full Article: Source

Why the commodities crush is very good for stocks

Posted on 23 July 2015 by VRS  |  Email |Print

With gold, crude oil and other commodities falling, several S&P sectors have taken a big hit. But as the popular CRB commodity index drops to new four-month lows, traders say this is actually a good sign for the S&P 500.
“It’s more of a concentrated weakness,” Ari Wald, head of technical analysis at Oppenheimer, said Tuesday on CNBC’s “Trading Nation.” “We’d be staying away from these commodity-exposed stocks, but for the market as a whole, we don’t think it’s very bearish. We think the S&P 500 can continue to do well.”……………………………………….Full Article: Source

Credit Suisse Says It May Finally Be Time to Buy Oil and Gas Stocks

Posted on 23 July 2015 by VRS  |  Email |Print

Even as energy prices fall again,one firm says it might be time to finally buy oil and gas stocks. Stocks of U.S. oil and gas companies have been so battered as commodity prices have fallen that it looks like there is finally an “attractive entry point,” Credit Suisse analysts said in a research note.
The suggestion to buy these stocks came with a caveat though: “We acknowledge we are early.” One key index tracking oil exploration and production stocks — the SIG Oil Exploration & Production Index — fell another 2% Wednesday. The index is down 18% in 2015………………………………………..Full Article: Source

Are the shares of gold mining companies a ‘buy’?

Posted on 17 July 2015 by VRS  |  Email |Print

A gold mine is a hole in the ground with a liar standing on top of it.”- unverified quote attributed to Mark Twain. Gold can’t seem to catch a break. Despite a parade of potential market roiling news, the reaction of the shiny yellow metal has been one of benign indifference.
After Federal Reserve Chair Janet Yellen’s testimony about the likelihood of an interest rate increase sometime this year, gold fell for a fourth consecutive day. Gold now trades at about $1,142 an ounce. Aside from a three-day stretch in November 2014, gold hasn’t been below $1,150 since 2009………………………………………..Full Article: Source

Will China stocks burn oil?

Posted on 14 July 2015 by VRS  |  Email |Print

It took until July, but the crude-oil markets have managed to ignore Chinafor most of the year so far. The price volatility that saw an 11-percent selloff in oil futures in the first quarter followed by a 25-percent climb in the second quarter was driven primarily by uncertainties regarding the situations in Greeceand Iran along with inconclusive data in the U.S. on rig counts and inventory levels.
Meanwhile, China, one of the largest consumers of crude oil in the world, has been largely overlooked. To the extent that oil investors were paying attention to China, it was mostly as a source of bullishness………………………………………..Full Article: Source

China stock rout: Boon or bane for gold?

Posted on 10 July 2015 by VRS  |  Email |Print

With China’s stock market meltdown now into its fourth week, what does this mean for gold demand out of the world’s second largest consumer of the precious metal? “Given that one of the reasons for gold’s tepid demand in China is due to the strong equity bull market, questions are now raised if the current bearish ‘A’ share market could spark Chinese interest in gold once more,” Howie Lee, investment analyst at Philip Futures, wrote in a note on Wednesday.
Chinese equities plunged to a four-month low on Wednesday, as panic selling gripped markets despite fresh measures by the government to shore up confidence, including easing rules for insurers to invest in blue-chips stocks, raising margin requirements for short positions against small-cap stocks and warning against “irrational selling.”……………………………………….Full Article: Source

China’s equity rout sparks metal meltdown

Posted on 09 July 2015 by VRS  |  Email |Print

The $3tn rout of Chinese equities has spilled over into commodities, pushing nickel, zinc and iron ore into bear market territory and sending copper to its lowest level since the financial crisis.
With more than half of companies on equity markets now suspended, traders in China are increasingly turning to commodities and industrial metals to raise cash to meet margin calls from share losses. Others are increasing their bearish bets as concerns about slowing economic growth in the world’s biggest commodity consumer intensify………………………………………..Full Article: Source

The 5 Best Stocks to Invest in Commodities

Posted on 02 July 2015 by VRS  |  Email |Print

Commodities aren’t for the faint of heart, which is why it’s best to just stick with the best stocks in each commodity basket. Commodities have been giving investors fits for years. All four commodities have taken investors on triple-digit price rides with rapid ascends and devastating falls. It’s that allure of a rapid rise that continues to draw investors in with hopes of making a mint on higher prices.
However, given that prices can change on a dime, it’s a warning to investors to stick with the companies that can survive the deepest of drops because as history shows those drops are sudden. With that, here are the five companies built to last, making them the best stocks to invest in commodities………………………………………..Full Article: Source

What Commodity Momentum Tells Us About Equities

Posted on 08 May 2015 by VRS  |  Email |Print

It is fact that equity prices prosper when commodity prices are relatively stable. Normally, it is the instability of commodities on the upside that disturbs equities, such as that experienced between 1973 and 1974. However, downside volatility in the commodity pits can be even more devastating. Just consider the sharp drop in both markets in the second half of 2008, 1921 or even the 1930/32 experience.
That said, we can use long-term trends in commodity momentum to signal favorable long-term environments for equities. This chart, for instance, features our secular commodity momentum indicator. It is calculated by dividing a 60-month by a 360-month MA of commodity prices………………………………………..Full Article: Source

Why they prefer commodities to equities

Posted on 04 May 2015 by VRS  |  Email |Print

Bengaluru-based Suby Mathews quit his high-profile banking job four years ago to pursue trading full time. Mathews too started off with equities and switched to commodities five years ago. Why commodities? The longer trading window, though it makes for more volatility, provides an opportunity to make more money. “The market is open till late in the night, which gives numerous short-term trading opportunities, albeit with a bit more risk,” he explains.
So, what are his favourites? He prefers to trade energy — crude oil and natural gas — and occasionally trades in gold too. Does he limit himself to just commodities? He trades in Nifty futures and options and occasionally in currency futures………………………………………..Full Article: Source

Iron ore jumps above US$50: Is it time to buy the miners?

Posted on 21 April 2015 by VRS  |  Email |Print

Iron ore has somehow managed to defy bearish market sentiment over the last few weeks, having recovered from a 10-year low to bounce back above the US$50 a tonne mark on Friday. According to data from the Metal Bulletin, the commodity rose 2.3% during the session to be trading at US$50.93 a tonne, compared to its recent low beneath US$47 a tonne. While iron ore has been on something of a tear recently; the rebound could well be short-lived.
Analysts and economists have taken turns in berating the outlook for the commodity, with some predicting prices will fall towards US$40 a tonne by 2017 while others, including Citi and Australia’s own Treasurer, Joe Hockey, have suggested it could fall below that level this year…………………………………..Full Article: Source

Investors fall out of love with Aussie equities, commodities

Posted on 01 April 2015 by VRS  |  Email |Print

Australian equities and commodities are firmly out of favour with international investors who prefer exposure to Europe, technology and health care. Institutional investors are bearish on the outlook for the local market because stocks look expensive, along with the prospect of the Australian dollar plunging and concerns around Australia’s reliance on China as a source of demand, a survey of respondents at the Credit Suisse Asian Investment Conference revealed.
In spite of this, Australian stocks have just posted the best first-quarter since 1991 with a return of 9 per cent sealed on Tuesday. Low interest rates and compelling yields on offer in equities have supported a wave of buying at odds with dour expectations for the domestic economy………………………………………..Full Article: Source

Louis Dreyfus Commodities Won’t Be Going Public

Posted on 27 March 2015 by VRS  |  Email |Print

Louis Dreyfus Commodities B.V., a privately held agricultural trading firm since 1851, won’t be going public. Margarita Louis-Dreyfus, the largest shareholder and most powerful corporate board member at the family-controlled company, said Thursday she would increase her stake in the firm to 80%, dashing hopes of an initial public offering or sale of a stake.
Ms. Louis-Dreyfus has steadily increased her holding since the death of her husband, Robert Louis-Dreyfus, in 2009. “We are a long-term investor, and to be a long-term investor it’s very important to have family control of the company,” Ms. Louis-Dreyfus told reporters at a Paris news conference as the company reported a small increase in 2014 net profit………………………………………..Full Article: Source

Should you invest in commodities or shares?

Posted on 11 March 2015 by VRS  |  Email |Print

With a burgeoning amount of products available to retail investors that provide direct exposure to commodity prices, we set out to investigate whether you would have been better off investing in instruments (like ETFs and ETNs) that provide direct exposure to commodity prices, or whether you would have fared better owning the underlying equity of resource/commodity companies.
But first a slight detour for the benefit of the uninitiated. In South Africa, investors have traditionally got exposure to commodities via shares of resource companies. This began to change with the development of the exchanged traded fund (ETF) industry in the early part of the last decade, which eventually led to the creation of the first commodity ETF………………………………………..Full Article: Source

Investors in Commodity-Related Companies Need To Be Aware Of This Risk

Posted on 25 February 2015 by VRS  |  Email |Print

The business of producing or trading in commodities have always been volatile. The fact that no player in the market has the ability to control the pricing of the underlying commodity they’re involved with makes it extremely challenging for any commodity-related business.
Steel manufacturer BlueScope Steel Ltd is a great example of how difficult it can be to be a commodity producer. Even though BlueScope Steel is the largest company of its kind in Australia, the Wall Street Journal had reported earlier today on the firm’s warning of weaker profit margins in the coming months………………………………………..Full Article: Source

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