Goldman Sachs was the great commodity cheerleader of this cycle. It has gone quiet of late perhaps because it has a lot of angry clients. Certainly, the recent data suggest a reversal of the great commodity super cycle trade that has unwound so spectacularly in the past few months.
RBC has more:
While major commodity indexes did improve over the course of July after an early month tumble–in average m/m terms, it was pretty ugly. For notional AUM across the commodity investor products universe we analyze in this piece, July was quite a negative month for the commodity space across the board. While the supply chain/natural resource-driven inflation narrative continues, prices faltered, recession headlines continued, and over the course of the last month, underlying outflows proliferated. Notably, both the commodity-linked index space and commodity-backed ETP space had tough months on both a price and underlying basis. The question is whether this is just a couple-month stumble after a strong start to the year, or rather a more enduring move. We do not think that we should be writing off the space just yet, but this is proof that commodities are indeed not invincible.
The full text of this article is available to MacroBusiness subscribers
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
