Is the next Commodity Super-Cycle right around the corner?
In recent years, commodity prices have reached a 50-year low relative to overall equity markets (S&P 500). Historically, lows in the ratio of commodities to equities have corresponded with the beginning of new commodity supercycles. As Visual Capitalist's Bruno Venditti shows in the infographic, using data from Incrementum AG and Crescat Capital LLC, the relationship between commodities and U.S. equities has varied greatly over the last five decades.
Europe is filling its gas storage weeks early
The world is becoming awash with natural gas, pushing prices lower and creating an overabundance of the fuel in both Europe and Asia — at least for the next few weeks - Bloomberg
Gold holdings as % of Nations private net wealth
Source: QuantInvestor.substack.com
OPEC is less worried about market share. Hence the production cut
Great point made by John Arnold on Twitter. The OPEC cut was only possible because of the inability/unwillingness of the US shale oil sector to grow at the same rate as it was in 2016-2020. With much less supply elasticity in the market today, OPEC is less worried about losing market share if it defends higher prices. Source chart: EIA
Commodities: why this time is different
To address the recent comparisons with 2008: today's macro setup could not be more different than the Global Financial Crisis. Back then, capital spending for oil producers was at record levels after a decade-long bull market in natural resource businesses. Today, aggregate capex is historically depressed while the commodities-to-equities ratio is near 50-year lows. Source: Tavi Costa, Crescat Capital, Bloomberg
China Gold Reserves keep growing
China lifts Gold reserves by extending buying to 3rd month. China has joined other nations in building up reserves of bullion. Source: HolgerZ, Bloomberg
The US government has almost completely ceased the drawing of its Strategic Petroleum Reserves
The US government has almost completely ceased the drawing of its Strategic Petroleum Reserves. We just saw the smallest change in SPR for over a year. Not surprising that oil prices firmed up recently as supply remains incredibly tight. Source: Bloomberg, Tavi Costa
The future value of disruptive materials
A number of materials play a critical role in the expansion of next generation technologies—potentially leading to a surge in demand and increased market values. Source: Visual Capitalsit, Global X
