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  • Both bonds and stocks have been on bull runs

  • of historic duration.

  • Bonds have been rising with occasional interruptions

  • for 40 years, stocks for 11.

  • But what we might call the third major asset class, commodities,

  • has not been joining the fun, at least not in the last decade.

  • But that is beginning to change.

  • Since they bottomed early in the pandemic,

  • all kinds of commodities - energy, materials, food -

  • have been rising steadily.

  • Here is a chart of copper, oil, and soybeans, all of which

  • show 60 percentage point increases since their spring

  • lows.

  • There are some good reasons for these price increases.

  • A decade of low commodity prices means

  • that producers have not invested in capacity, crimping supply.

  • Once the vaccination process is over commodity stocks that

  • have been allowed to dwindle will have to be rebuilt.

  • Fiscal stimulus, if as promised it is spent on infrastructure,

  • will increase demand for commodities, too.

  • Green infrastructure, for example,

  • requires a lot of copper.

  • And finally, the US dollar has been weakening.

  • And as it does, investors' expectations

  • of future inflation have gone up.

  • Investors buy commodities and commodity futures

  • as a hedge against future inflation.

  • So all of this has a certain logic.

  • But these days, whenever any asset pops, you have to ask,

  • is this a bubble?

  • With rates at historic lows and money sloshing around markets,

  • every rally is suspect.

  • The price of silver, for example,

  • took an oddly sharp jump this summer

  • and since then has been popular with the very same

  • retail investors who have pushed the shares of GameStop

  • to bizarre highs.

  • GameStop, though, was easy to see through.

  • There was never much there but hype and hope.

  • The price of silver and other commodities

  • are more akin perhaps to US tech stocks.

  • There is enough of a fundamental story

  • there to justify high prices.

  • But how high?

  • Commodity prices, in other words,

  • look less like a bubble than an excellent setup for one.

Both bonds and stocks have been on bull runs


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How strong is the commodities rally? | Charts that Count

  • 8 1
    洪子雯 に公開 2021 年 02 月 12 日