October 2018

<strong>Discounts Could Prod Broad Commodities Into Bull Market Mode</strong> (Bloomberg Intelligence) -- Commodities appear to be a bull market beginning to respond favorably to discounted prices. Energy is the primary sector at a premium, which should give way some to metals, at a discount. Agriculture remains the weakest sector, but with limited downside as it shows divergent strength despite a near perfect storm for lower prices this year. All storms pass. Looking a year ahead, broad commodities should be higher, though a stronger U.S. dollar and declining China growth are key risk factors. Trade tension fears should subside, while the 23% drawdown in copper is an indication that the correction has gone a bit too far. Crude oil did the same a year ago, setting the stage for recovery.