Global Commodities Deflating Rapidly

[errolanderson]

Copper latest commodity getting hammered yesterday . . . erased three months of gains in one (1) day.

Gold prices trending down, feeder cattle take hit over past week, grains . . . well.

Is crude oil next on the list? . . . .

How will equities fair in the month of May?

U.S. 3.2% GDP in 1st quarter . . . unbelievable in my opinion. But investors addicted to-the-hype.

[farming101]

Seasonally, equities usually pull back in May/June. I would expect the same this year

[ajl]

Given that oil prices have their seasonal highs this time of year, I am looking for declines soon. Interest rates are starting to head higher again, so this is likely a peak for equities as well. I am surprised at how well they have done this quarter. The US economy has done remarkably well considering the ROW is all but dead, but the 3.2% print is likely optimistic. US data has more credibility than Statscan mind you. Nobody believe a word of what they say any more.

[farming101]

Given that oil prices have their seasonal highs this time of year, I am looking for declines soon. Interest rates are starting to head higher again, so this is likely a peak for equities as well. I am surprised at how well they have done this quarter. The US economy has done remarkably well considering the ROW is all but dead, but the 3.2% print is likely optimistic. US data has more credibility than Statscan mind you. Nobody believe a word of what they say any more.

Hmmm, I think crude usually peaks in the fall....

[ajl]

Crude has two typical peaks per year: one in the spring as people are making summer vacation plans, and the second in the fall prior to home heating season. As heating is more done with NG and propane these days, the spring one has become more prominent.

[errolanderson]

Trump wants stock markets fully juiced heading into 2020 election . . . calling for 1% cut in Fed rates and another round of money printing (QE4) . . . .

Economic insanity that commodity markets are not buying into . . . .

[Agvocate]

No incentive for Trump to strike a deal with China until its an election year. In the meantime it's small headlines one way or another that slightly move commodity markets.

[SASKFARMER]

Boom 💥

[errolanderson]

So much for a U.S. China signing ceremony . . . Trump tariff hike threats now hammering equity futures. This may be the biggest market head-fake since 1987.

[ajl]

So much for a U.S. China signing ceremony . . . Trump tariff hike threats now hammering equity futures. This may be the biggest market head-fake since 1987.

US equities recovering already. if you have shorts you better lift them fast. People know that china needs the US more than the other way around.

[jazz]

US equities recovering already. if you have shorts you better lift them fast. People know that china needs the US more than the other way around.

Trump is going to bring china to heal no matter what. Chinas economy is all export. US is not. They cna weather the pain. US is a 250 yr old capitalist economy. China is a great fake out. Trump has all the levers.

[errolanderson]

Trump is going to bring china to heal no matter what. Chinas economy is all export. US is not. They cna weather the pain. US is a 250 yr old capitalist economy. China is a great fake out. Trump has all the levers.

jazz . . . Don’t count on it. China has time on their side, Trump doesn’t. There is no quick ‘let’s sign a deal’ anytime soon. Trump is playing high stakes poker. If he follows through on his tariff threat, this could this could spill the goldilocks stock market.

China will not bend to a heavy tariff threat. That would be a sign of weakness. Trump has mis-calculated the resilience of China. If equity markets were in disarray, there would be more pressure to make a deal (IMO).

There are a lot of uncertainties straight ahead. Trump’s attempt at a strong arm move to force a deal could backfire should stock markets continue to falter through spring. The likihood of a deal now is quite low (IMO). This is obviously frustrating the U.S. And if there is a deal signed, it will certainly not be Grand .. . . .

[ajl]

Yes i don't believe there will be a deal but the US don't need one, China does. Those exports have to go somewhere and nobody else has the money to buy. China is very resilient because they don't have elections and they know hardship. As far as the US is concerned, they might as well have a tariff rather than domestic taxation.

[errolanderson]

All is good, until the stock market blows-a-tire . . . then all bets are off.

[jazz]

Errol, I disagree. US has to make it stand here and now and they will. Tarrifs are a blunt instrument. All that chinese junk with a 25% hike on it make it much tougher to sell into the US market. The tarrifs initially start out as income to offset prices but eventually it becomes economical to make at home what was being imported. There is no way the US loses this battle.