CMDY - DBB: The Cyclical Downturn Has Likely Begun

• In March, we argued that commodities are likely to turn down as a commodity shock gives way to a growth shock.
• Deflationary forces are now making themselves felt not only in cyclical leaders like precious metals, but in every single industrial metal.
• Industrial metals cycles have long had a strong correlation with earnings cycles, thus indicating that earnings are likely to decelerate as well.
• Energy and agricultural commodities, cyclical laggards, are likely months behind the metals.
• With stocks, GDP growth, and metals slumping, Treasuries are looking like an increasingly attractive alternative.

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