Opening Statement from the June 2018 CCPM Forecaster
Originally published on June 3, 2018
Overview
For several months we have been discussing the broad based strength in the global economy. One might assume this would necessarily translate into higher pricing for commodities. On the contrary, pricing for most commodities has remained relatively subdued. In contrast, stock markets have soared as a result of higher earnings growth estimates.
Given our forecast for a relative improvement in global macroeconomic activity, we have previously warned traders that commodities pricing is not likely to really “take off” for the foreseeable future for a variety of reasons.
Although commodities pricing mounted a nice rally after reaching a cyclical bottom in 2016, much of the gains since then have been restricted to crude oil and base metals. Commodities might have traded higher than they have as a result of gradually increasing inflation if it were not for recent issues that have weighed on global investment and trade. Specifically, both businesses...
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