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Bloomberg (July 20)

2018/ 07/ 22 by jd in Global News

“What’s next for commodities after a recent price collapse? It looks like more bad news, if the chart watchers are right. The Bloomberg Commodity Index has tumbled about 10 percent from a high in May amid mounting concerns that a trade war could derail global growth, curbing demand for everything from aluminum to soybeans.”

 

Bloomberg (March 9)

2018/ 03/ 12 by jd in Global News

“China is cracking down on pollution like never before, with new green policies so hard-hitting and extensive they can be felt across the world, transforming everything from electric vehicle demand to commodities markets.” China is now, by far, the largest global carbon emitter, but the “government is trying to change that without damaging the economy—and perhaps even use its green policies to become a leader in technological innovation.”

 

Bloomberg (December 10)

2015/ 12/ 11 by jd in Global News

“Investors betting that China’s near-insatiable appetite for industrial raw materials will drive global economic growth may want to skip the shipping news. For the first time in at least a decade, combined seaborne imports of iron ore and coal — commodities that helped fuel a manufacturing boom in the world’s second-largest economy — are down from a year earlier.”

 

Wall Street Journal (November 25)

2015/ 11/ 27 by jd in Global News

In the U.S., “the pressure on corporate profits may last longer than expected.” Many have attributed the contraction in corporate profits to temporary trends, namely “the weakness in the commodities sector, which is ravaging profits at energy companies, and the strong dollar, which is putting pressure on multinationals.” Though reassuring, “the problem with those dismissals is that oil may not be done going down, and the dollar may not be done going up.”

 

The Economist (September 26)

2015/ 09/ 27 by jd in Global News

“With China’s “decades-old investment boom fast dwindling, it needs consumption to kick in as a new driver of growth.” Fortunately, rebalancing is progressing with retail sales increasing “by 10.5% in real terms this year, well ahead of economic growth.” Amid industrial downturn, “China’s consumer boom is real. But do not count on it to lift the global economy.” This great consumer rebalancing is even less likely to benefit “commodity-exporting countries whose fortunes have hinged on China.”

 

The Economist (August 22)

2015/ 08/ 23 by jd in Global News

“A resurgent dollar has hammered commodity prices: many have recently fallen below their levels of a decade ago.” There may be worse to come. “The real curse for producers is over-supply in almost all raw materials. Yet they continue to act as if they are blithely unaware of it. Capital is still pouring into holes in the ground, creating a hangover that may last at least a decade.”

 

Institutional Investor (July 14)

2015/ 07/ 15 by jd in Global News

Brazil hopes that a return of foreign capital might provide “an economic boost.” The country sure needs it. The economy has slumped “from 7.5 percent in 2010 to just 0.1 percent in 2014.” It is now in recession. “The end of the global commodities supercycle and the oil market collapse explain much of the decline, but domestic policy problems—including a growing deficit and accelerating inflation—are also to blame.”

 

Euromoney (May Issue)

2014/ 05/ 23 by jd in Global News

Trading in fixed income, currencies and commodities (FICC) is being transformed in a manner that’s benefiting investors and putting the squeeze on many big banks. “The move to electronic trading is accelerating; margins are getting tighter (no sign of oligopolistic pricing here), as competition and transparency grows, and the costs of maintaining a leading tech platform, once built, never go away.”

 

Institutional Investor (April 24)

2014/ 04/ 26 by jd in Global News

To strengthen their balance sheets, large banks (including Deutsche Bank, Royal Bank of Scotland, UBS, Morgan Stanley, JPMorgan Chase and Barclays) have been reducing their commodities businesses, mainly through sales to independent trading companies. With these sales “to smaller players, conflicts of interest remain a potential problem” and nobody’s sure whether new problems will accompany this major shift. Given the skinnier balance sheets of the new players, market liquidity could conceivably suffer. In addition, “concerns abound that the underlying problems that have traditionally beset the commodities markets are simply being pushed onto a new and less tightly regulated set of actors.”

 

The Economist (March 8)

2014/ 03/ 08 by jd in Global News

“Western firms have piled into emerging markets in the past 20 years. Now comes the reckoning.” The Fed’s quantitative easing, an over-exuberant investment cycle, rising local currency prices for commodities, and other factors are undermining the emerging market paradigm. “Plenty of firms and some whole industries need a rethink. The emerging-market rush may end up like a giant version of the first internet boom 15 years ago. The broad thrust was right but some big mistakes were made.”

 

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