The big talking point this morning is that some of the US companies are getting a little bit cautious and the US seems to be preparing for the delta variant. Amazon has already pushed back their work-from-home timeline. But the markets seem to be completely shrugging off any threat from the third wave or the Delta variant?
As you know, markets everywhere have been going through the roof. It has been unprecedented because we have had so much money printing by central banks all over the world. I am not good at market timing but I am sure it is going to come to an end some time in the next few months. This has never happened before.
Unlike equities, commodities are getting a little bit more sensitive on the news flow around Covid. We have seen a bit of a knee-jerk reaction in crude overnight. It could have a domino effect on raw material prices, inflation and thereby earnings of corporates?
Well the cheapest asset class in the world at the moment happens to be commodities. Bonds are in a bubble everywhere. Many stocks have started to form a bubble. Property in Korea, New Zealand and many places are in a bubble. But commodities are still cheap. Silver is down 50% from it's all-time high.
Oil is down over 50%. I do not know whether oil is going to go up and down this week. The known reserves of oil continue to decline. The fracking bubble has popped and so I would suspect we are going to see strength in oil in the next few months. Not every day, not every week but oil is down a lot from it's all-time high...
- Source, Economic Times, read more here
