Summary
- One of the key assumptions behind commodity markets is that it is economic demand that drives pricing.
- It has been long-conflated that sentiment drives economic activity and that certain correlated indicators are believed to be economic measures and good predictors of future economic activity and equity markets.
- The recommendation remains to avoid longer-dated maturities and to populate portfolios with industrial and energy-related issues which have economic demand and the flexibility for inflation pass through.
For further details see:
Oil Prices Are Not An Economic Predictor