Market insights

Kelvinpek
2022-03-27

With inflation still accelerating, commodity prices surging and central banks around the world raising interest rates, there are many red flags in the market, including a potential inversion of the yield curve. When the Fed starts raising interest rates, it may expose some problems in the financial system. For example, some large banks with large derivatives exposures are under pressure from unexpectedly high interest rates. This creates a huge financial problem. I have always believed that the question of raising interest rates in a highly leveraged economy is going to be all sorts of unknown events that can happen. "However, when the Fed tried to tighten monetary policy in 2018, it was forced to change everything because of liquidity issues. "Maybe black swans won't be in agriculture or oil, but in a strange kind of financial Derivatives field. That could stop the Fed from raising rates further, and perhaps the Fed will have to go back to easing. Regarding the end result, he believes: "We're going to have a massive bull market in commodities driven by the same factors that drove the big bull markets in commodities in the 1970s and early 2000s." Between 2010 and 2020, commodities far underperformed financial assets, which were vastly undervalued relative to financial assets. Based on past performance, commodities can fundamentally outperform over the next 10 years. The bull market will run from now until 2030 and will be supported by a new layer of investment demand from tech investors. The oversold and supply-demand backdrop in the commodities sector will allow new capital to make a home here. We will be shocked by the new money flowing into the commodity market and its impact on commodities. After the epidemic, black swan events have continued. Based on the above news, there may be black swans in the agriculture, oil and financial industries in the future. It is expected to boost the market's risk aversion and benefit the price of gold. Investors need to remain vigilant.

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Comments

  • MortimerDodd
    2022-03-28
    MortimerDodd
    So we should now invest in companies with healthy cash flow. Investment banking is a good choice right now, what do you think?
  • HilaryWilde
    2022-03-28
    HilaryWilde
    It can be expected that the stock market in the second half of the year will not be very good.
  • EvanHolt
    2022-03-28
    EvanHolt
    I heard that the interest rate will be raised by 50 basis points in May, which is too cruel.
  • ElvisMarner
    2022-03-28
    ElvisMarner
    Yes, rate hikes are dangerous for highly leveraged companies.
  • gleezy
    2022-03-27
    gleezy
    The hike of 50 basis is out many people's prediction.
  • fizzzi
    2022-03-27
    fizzzi
    The rise of commodities is really a concern recently.
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