iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,541 Blog Posts

Utter Collapse in Commodity Space

For reasons that escape me at the moment, we are seeing terrible action in the commodity sector and it’s not just limited to the oils. Oil is down about 9% the past week followed by silver down 8% and copper down 6.5%. The US 10yr is also coming in at 4.35%, just in time for the summer housing market.

My take is more constructive than others. I think this action is merely revoking the recent upwards surge in commodities, which was predicated on the notion that inflation was making a comeback. Bear in mind, copper was +5% in March, +12.7% in April, and flat in May. This move lower, now just off by 1.5% for June, is nothing in the big scheme of things.

Same goes with oil.

Jan +6.4%
Feb +3.4%
March +7.3%
April flat
May down 4.5%
June down 5.3%

We are getting back to where the rally started, rendering the commodity space, in my opinion, an undesirable investment. The good news is, the drop in commodities is a net benefit for the consumer, as well as the drop in rates. In other words, the action is poor in commodities, but this negative sentiment should not shift into the general tape.

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