Commodities are on the rise and may outperform stocks, based on recent political and economic developments.
Since 2022, commodities ($CRB) are up 33.9%, stocks ($SPXTR) are up 31.9%, the US dollar index ($USDX) has gained 14.3%, and the 20+ year bond total return is down 35%.
As a result of common-sense macroeconomic analysis, stocks, commodities, and the US dollar are going up while long-term bonds are going down. This is because inflation is still high and investors expect lower interest rates while the government debt and deficit spending are going up. The talk about tariffs is propelling the US dollar higher.
The CRB index ended last week with a gain of 1.7%, on top of a 3.2% gain two weeks ago, and it remains above the long consolidation channel that had been in place for two and a half years.
The CRB index is now about 5.6% below the 2022 highs. Note that the majority of macro analysts were expecting a downtrend in commodities starting in mid-2024.
Subscribe below for notifications of new posts and updates from the Price Action Lab Blog and get the free PDF book “Profitability and Systematic Trading” (Wiley, 2008).
Premium Content
By subscribing, you have immediate access to hundreds of articles. Premium Articles subscribers have immediate access to more than two hundred articles, and All in One subscribers have access to all premium articles, books, premium insights, and market signal content.
Specific disclaimer: This article includes charts that may reference price levels. If market conditions change the price levels or any analysis based on them, we may not update the charts. All charts in this article are for informational purposes only. See the disclaimer for more information.
Disclaimer: We only provide the articles for informational purposes, not as investment advice or actionable content. We do not warrant the accuracy, completeness, fitness, or timeliness for any particular purposes of the articles. You should never treat the articles as financial advice. The author of this website is not a registered financial adviser. Before subscribing, please read our Disclaimer and Terms and Conditions.
Charting and backtesting program: Amibroker. Data provider: Norgate Data
If you found this article interesting, you may follow this blog via RSS, email, or Twitter.
