Debate on the quality of the hottest commodity bul

2022-09-19
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Debate on the success of commodity bull market

driven by the strong performance of commodities such as "king of commodities" crude oil and "Dr. copper", the commodity market, especially industrial products, continued the bull market pattern as a whole, hitting new highs in recent years, thereby attracting funds to rush in

according to the data provided by Barclays, a British financial institution, the asset management scale (AUM) of global commodity related investment products increased to $311 billion in December 2017, a four-year high

Shawn Hackett, President of Hackett financial advisors in Florida, believes that commodities will start a 10-year bull market from 2018. However, the "king of commodities" crude oil entered the adjustment after hitting a new high, making institutional people doubt whether this cycle will peak in advance

analysts believe that the bull market cycle of bulk commodities can be divided into four stages: "impact", "adjustment", "expansion" and "selling". 2016 is the starting point of this cycle, and will experience the "impact" stage of supply-demand mismatch for two to three years. According to this inference, 2018 may be the end of the "impact" stage and the beginning of the "adjustment" stage, thus entering the race to challenge the strength of traders

"King" glory

commodity prices have reached new highs. According to Wenhua finance data, the Brent index has risen 48.01% since its low on June 22, 2017, reaching $69.07/barrel, a new high since May 7, 2015; The Lun copper index has risen 28.11% since its low on May 9, 2017, reaching $7312.5/ton, a four-year high. The London gold spot index has increased by 9.76% since July 10, 2017, reaching a new high of $1357.67 per ounce, a record high for more than a year

in terms of capital inflows in December last year, commodity investment received a net inflow of US $3.4 billion, of which energy investment attracted us $1.4 billion, ranking first; The second is agricultural products, with a net inflow of $900million; Precious metals and non-ferrous metals received a net inflow of US $500million respectively

"under the good global economic situation, the rebound in commodity prices, tightening on the supply side and increased regional risks have stimulated commodity investment." Barclays analyst Warren Russell said

the bull run of bulk industrial products has also made related sectors favored by funds in the A-share market. The Shenwan mining index and the steel index have increased by 14.22% and 26.5% respectively since the low point on May 11, 2017. During this period, both reached new highs since August 26, 2015

the rise of commodity prices has a direct beneficial effect on the operating profits of enterprises. Wind data statistics show that 108 listed companies in the three sectors of Shenwan mining, steel and non-ferrous metals have issued performance forecasts, of which 90 listed companies have pre increased, slightly increased, continued earnings and reversed losses, accounting for 83.33%

the global economic recovery combined with China's supply side reform and environmental protection measures is the key factor to boost the bull market in bulk commodities; At the same time, the boom in electric vehicles and new energy has made investors optimistic about the prospects of cobalt, nickel, copper and other metals. Looking forward to 2018, Warren Russell believes that the global economic outlook in 2018 is still strong, supporting a wider range of commodity investment transactions, but some special factors may lead to the weakening of bulk commodities such as oil and copper relative to the current level

Goldman Sachs, an international investment bank, said it was optimistic about the theme of commodity re inflation investment in 2018 and maintained its overweight rating. It was expected that the return on commodities would reach 10% in the next 12 months. Among them, in 2018, energy assets will achieve a return of 15% driven by oil prices

"commodities will outperform other assets in 2018, because commodities will always rise sharply in the late economic cycle." Jeffrey guwal, CEO of doubleline capital, which is known as the "king of new bonds" and manages more than $100billion in assets, said ndlach that the microcomputer controlled electro-hydraulic servo horizontal tensile testing machine can also be configured with various length measuring devices with a measurement range of 0~3000mm

debate on super cycle

it is reported that the S & P GSCI total return index, which tracks 24 raw materials, hovers near historical lows relative to the S & P 500 index, the benchmark index of the U.S. stock market

in this regard, Shawn Hackett believes that this indicates that commodities will start a 10-year super bull market from 2018. "In 2008, the valuation index sent a strong stock buying signal, which has proved its correctness. Now the valuation index sends a strong commodity buying signal."

the view about the arrival of the commodity super cycle was mentioned by insiders as early as 2016. Torsten dennin, a senior portfolio manager who worked for Deutsche Bank for seven years, said: "2016 is the starting point of a new round of commodity bull market that has lasted for several years."

similar to Torsten dennin, Frank Holmes, CEO and chief investment officer of U.S. global investors, an investment company in charge of $2.6 billion in assets. He said in January 2017, "the dark days of commodities may have passed. With the expansion of global manufacturing and inflation finally beginning to accumulate momentum, we see encouraging signs that commodity prices have bottomed out and a new commodity supercycle has begun."

however, the new statistics of the China Futures Association show that the trading scale of the National Futures Market in December 2017 decreased compared with the previous month. On a unilateral basis, the trading volume of the National Futures Market in that month was 252534087, with a turnover of 16517.507 billion yuan, a year-on-year decrease of 12.22% and 5.44% respectively, and a month on month decrease of 3.42% and 5.86% respectively. In 2017, the cumulative trading volume of the National Futures market was 3076149758, with a cumulative turnover of 187896.41 billion yuan, a year-on-year decrease of 25.66% and 3.95% respectively

prices have reached new highs, and it is obvious that there has been the pressure of capital outflow. Moreover, some investment banks have questioned the recent strength of oil prices. For example, this is due to increased pressure. For example, Carsten Fritsch, an analyst at German commercial bank, said that the sharp rise in oil prices was an overreaction of the market, and oil prices were increasingly divorced from fundamental data

bottom hunting or top flight

then, after a strong rebound, has the commodity bull market entered the peak building stage

according to the report written by Torsten dennin2016, over the past 50 years, that is, from 1970 to 2016, bulk commodities have experienced three price cycles, one of which lasted for nearly a decade from 1999 to the summer of 2008, and is known as the "bulk commodity super cycle". During this period, the growth of China's economy gave birth to a huge demand for commodities, pushing prices to unprecedented levels. However, compared with the increase of the previous two rounds of commodity bull markets, 318% in 1970-1974 and 193% in 1986-1990, the "commodity super cycle" only has a longer time span

crude oil dominates the yield of commodity index. The reason is that crude oil products such as fuel, diesel and gasoline are directly related to crude oil, and the weight of oil in the commodity index itself is very large. In addition, the price of crude oil will permeate the price of agricultural products and metals, which is reflected in the cost from transportation to processing. "Therefore, it is not surprising that the climax of the first phase of each cycle is triggered by high oil prices."

torsten dennin said that the acceleration of economic activity and the recovery of interest rates are not necessary conditions for the increase of commodity market sentiment, but investors should pay close attention to the accelerated recovery of inflation and the end of the US dollar bull market. As for the energy and metal markets, the bull market has taken shape: first, many bulk commodities have been at the bottom, but the price is still low; Secondly, excess inventory will not continue to increase; Third, the strategic focus of commodity enterprises is still tightening and reducing output. An important case is the decline in U.S. crude oil production, and the oil price fell to $26 a barrel in early 2016, creating a benign bottom

"the superposition of these factors strengthens our prediction, that is, in the year, a new pattern of commodity market will appear and continue to strengthen, which will again show that demand will seriously exceed supply, and the average price of bulk commodities will rise significantly." Torsten dennin said that each commodity cycle since 1970 has been composed of four stages, which are called "impact stage", "adjustment stage", "expansion stage" and "surrender stage". In the case of a commodity bull market, 1 the gap is relatively large, starting from the "shock stage", which is characterized by the short-term mismatch between supply and demand (supply exceeds demand), and the rise of commodity prices year after year. What follows is the "adjustment stage" of price. Then there is the "expansion stage", when the supply of goods increases and prices accelerate. Supply and demand once again entered the peak of mismatch (oversupply), and commodities suffered capitulation selling

from the time line, bulk commodities have experienced a two-year rise in 2016 and 2017, which is in line with the first stage of the commodity cycle - "impact stage" described by Torsten dennin. What will follow will be the "adjustment stage" of the price, which means that 2018 may enter a window period connecting the "shock stage" and the "adjustment stage", and the transaction will be more difficult. When the price adjustment is sufficient, it will enter the "expansion stage", during which the supply of goods is increasing and the price will accelerate

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