4 Trades You Need To Know For Current Market Turmoil
Markets have been making it very clear that all is not well in the global economy. What does this mean for your portfolio, and how should you position yourself?
Markets have been making it very clear that all is not well in the global economy. What does this mean for your portfolio, and how should you position yourself?
US lumber prices are down ~50% from their highs. Even though this drop comes after a sixfold rally, it does hint strongly at some kind of underlying change.
Having soared to new highs after global shutdowns and reopenings, copper prices have started to cool off. Does this tell us anything useful about the future?
What if demand is due to businesses confidently investing in future capacity? Is this enough to drive a new supercycle? If not, what could possibly do so?
The same productive capacity that was built to meet elevated levels of demand also sows the seeds of the supercycle’s end. Is this what happened with Covid?
Talk of a commodity supercycle has risen to a fever pitch. This is based on higher prices across a broad range of commodities. But what is a supercycle?
What about demand? The narrative runs along the lines of, “lower USD boosts demand by lowering the price of a commodity in other currencies”. How true is this?
QE is blamed for causing higher commodity prices by debasing the USD. But a weaker USD on its own does not lead to higher commodity prices; quite the opposite!
Does QE lead to rising food prices? A chart of food prices vs bank reserves would suggest that it does. But remember that correlation is not causation!
What do lumber prices tell us about inequality, the labor market, and future economic consequences? Could they hint at future social and political upheaval?