Commodity Markets Outlook and Strategy:Seasonal spreads at the cyclical crossroads
http://msn.finance.sina.com.cn 2012-05-10 05:30 来源: 新浪财经
When warm weather collides with a weak economy: Spring hasarrived in the Northern Hemisphere, following the 4th-warmest winter inthe US since 1895. Meanwhile, by our calculations, April 30 marked thesix-month anniversary of the start of a mid-cycle slump in the US, whichwe expect to end within weeks. Normally, that transition would mark asignificant change in momentum for commodity returns. However, thecurrent environment remains abnormal, with potential growth depressedby the backlash to European austerity measures, sluggish Asian demand,heavy debt, election-year politicking, and lackluster sentiment. Growthoff the mid-cycle trough is not likely to impress: our economists forecastglobal real GDP growth will be 2.3% in 2012 and 2.6% in 2013.
Underweight rewarded: In late November 2011, we downgraded ourrecommended commodities allocation to underweight on the expectationthat a European recession and manufacturing slumps in China and theUS would produce significant underperformance relative to financialassets. Equities have since trounced commodities: global equity totalreturns have beaten the S&P GSCI by 1156bp. Bonds have beaten theDJ-UBS total return index, which has lost money (–3.3%). We raisedour call to neutral on Feb 9 and continue to prefer spreading strategies.