Its been a wonderful holiday season but its time again to get back down to work.
As the first post for 2014 lets start with the great under performer of the last few years. Namely commodities!
And here some geopolitical outlook for 2014 which, depending on what occurs, can affect commodity prices dramatically.
Bring up a 5 yrs chart of the CRB (Reuters Jefferies commodity research Bureau index ) and look at the US and European inflation indexes also look at real interest rates at the 10yr level. Mean prices usually revert once “extremes” have been reached. Commodities and these macro indicators mentioned are indicative that something is not quite right here at these extended and record breaking US equity index levels. Either commodities are about to bounce dramatically (inc gold) or we will likely see a spectacular 2014 correction in risk assets, lead by equities as the beta, possibly alpha!
MM reports to follow this evening.
Rich