Commodities & Energy Sector
The SEC has just approved bitcoin spot ETFs, but does bitcoin have any ‘intrinsic’ value? In this Special Report we explain why the answer is yes, how bitcoin compares with gold, and why the bitcoin price could ultimately head well north of $100,000.
The US manufacturing renaissance, spurred on by reshoring, automation, and government spending, is running its course but progress has slowed on the back of tight monetary conditions and the manufacturing recession. The deceleration of these positive trends weighs on the outlook for the Capital Goods industry group, impeding its performance over the short term. However, we reiterate that positive long-term trends for the industry remain intact. We downgrade Capital Goods to a tactical underweight. It remains a strategic overweight.
The global green energy rush faces mounting headwinds. Additional global solar and wind capacity installations will have considerable growth reduction this year. Copper prices did not drop much in 2023 due to surging demand from green power build-up. Green power will be less positive for copper demand in 2024 than in 2023. We expect more downside in global renewable energy stocks.
We share the edited transcript of a webinar we participated in discussing global trade, trade wars and tariffs, as well as de-risking strategies.
In this note, we preview the Q4-2023 earnings season and share what we will be watching.
In this brief Insight we examine the expanding Middle East conflict and update the situation in the Taiwan Strait on the eve of elections. The Houthis are a distraction and China is not likely to invade Taiwan in the near term, but both situations support our overweight of US equities relative to global. Global growth is likely to slow while commodities are likely to see at least minor supply shocks.
The expectation that China is best placed to win the global EV race presumes the persistence of the status quo. Reality, however, may differ as the sector looks set to be hit by a range of changes. If nonlinearity were to emerge in the global auto sector, as it often does, then the EV transition could end up spawning a very unexpected list of winners and losers.
Increasing gray-zone confrontations and another round of tariff and non-tariff barriers to trade are not being reflected in commodity prices. This is keeping inflationary pressures emanating from the real economy subdued. That said, inflation risks are increasing as threats to commodity supplies and supply chains grow. Standard monetary policy focused on aggregate-demand management is ill-suited for addressing these risks, and could exacerbate supply-side tightness. We remain long oil- and metals-producer equities exposure via the XOP and XME ETFs, and to commodities outright via the COMT ETF.