1- #ConnectingTheDots Commodities/Oil & Gas
We are currently in the ~4th inning of an economic slowdown
We are currently in the ~4th inning of an economic slowdown
3- The world economy's last bastion, the US Consumer, shows signs of weakness
This is likely driven by lower income groups who used up their savings
This is likely driven by lower income groups who used up their savings
4- In China, Covid will suffocate economic activity for most of the winter
We are at the beginning of a big wave that likely peaks in 4-6 weeks
Chinese mobility very likely declines from here
We are at the beginning of a big wave that likely peaks in 4-6 weeks
Chinese mobility very likely declines from here
5- Meanwhile, the market perceives US monetary policy to have softened
This lead to a sell off in the US Dollar and US Treasuries that seems to near its end
J Powell speaks on the 30th November, what do you think he'll say?
brookings.edu/events/federal…
This lead to a sell off in the US Dollar and US Treasuries that seems to near its end
J Powell speaks on the 30th November, what do you think he'll say?
brookings.edu/events/federal…
6- Oil & Gas and commodities may be secular winners over the next 5-10 years, but they remain highly cyclical industries
Recently, they diverged significantly from their underlying cyclical trends
Recently, they diverged significantly from their underlying cyclical trends
7- $XLE $XME $SXPP are well-owned with many "believers". This creates downside risk as economic realities set in
Short term, I see much downside for these sectors
End.
Short term, I see much downside for these sectors
End.
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