Released July, 2017
The first month of the year commodities beat stocks, which is a good sign, but should have negative repercussions for primary assets, if sustained. Indicating a market transitioning to demand driven, the Bloomberg Commodity Index's 2.3% total return in July beat the spot gain by the most since June 2014. Indicating demand in excess of supply, backwardation is prevalent not only in livestock, but also energy, the most expensive to store sectors. Copper leading metals gainers indicates an organic recovery. Commodities seem to have shifted to the refresh stage after a 1H pause. Higher commodities and a declining U.S. dollar have been mostly absent since the global crisis. Now that reflation fears have been mostly alleviated, renewed commodity vigor appears to be in early days.