Wall Street’s commodities bubble is going swimmingly. The latest bucket shop to push the new ‘supercycle’ is Morgan Stanley:
Commodities outperformed equities in 2021, but only for the second time in a decade. It didn’t used to be like this: in half the years between 1970 and 2010, commodities beat equities. Given several tailwinds, we think this can start to happen more often again.
Rally to continue: The Bloomberg Commodities Index rallied 27% in 2021, compared to the MSCI World, which returned ‘only’22%. This was only the second year since 2010 that commodities outperformed equities. Several tailwinds,however, boost commodities’ prospects for coming years: