What happened in commodities this week?
The commodities I am invested in had a great week. Despite that, the GSCI was flat because of major losses in natural gas (-8.59%) and oil (-8.56%).
- Copper: +4.5%
- Gold +0.35%
- Silver +5%
- Uranium +0.29%
- GSCI +0.14%
The dollar finally had a slap by reality this week, with the Euro gaining strenght.
- DXY -0.58%
What is this week’s show about?
This week’s show is based on three pillars.
The FED
The FED’s messiah Jerome Powell spoke at the Cato Institute conference this week and confirmed what other FED officials have been saying throughout the last few weeks; The FED won’t lift its foot off the gas on interest rates until inflation has been defeated.
I discussed that with Lobo Tiggre, who came to the conclusion that hiking interest rates a lot more from the current 2.50% would cause a massive recession. Lobo says we shouldn’t trust the FED and that they will chicken out as they don’t want to go through the pain.
The ECB
Christine Lagarde contradicted herself by saying that inflation in Europe is not the central bank’s fault, it’s a supply chain issue but she will try to fix that by killing demand through higher interest rates.
The ECB hiked interest rates by 75 basis points this week. This is the highest rate hike the banks has done.
The ECB’s president Christine Lagarde promised that she won’t stop for anybody or anything until inflation is back to their goal of 2%. It might take two to five more rate hikes, she said.
Lobo, once again, says that central banksters should not be trusted.
China
China proposed a new $44B infrastructure plan, which is seen as positive for commodities.
Chinese imports, exports, and trade balance all came under analysts’ expectations this week, though copper imports are up over 25% YoY.
Lobo is of two minds on the matter as continued lockdowns could hurt China’s economy and therefore commodity demand. On the other hand, their growth story could be a very positive thing for commodity demand over the long run.
Conclusion
Lobo Tiggre is still bullish on commodities, but uranium he calls the “most undervalued”.
Economic Calendar for Next Week
Next week is all about inflation.
Monday, 12/09
- US Consumer Inflation Expectations
Tuesday, 13/09
- US Inflation (CPI)
- Previous: 8.5%
- Forecast: 8.1%
Wednesday, 14/09
- UK Inflation (CPI)
- Previous: 10.1%
- Forecast: 10.2%
- US PPI
- Previous: 9.8%
- Forecast: 8.9%
Thursday, 15/09
- US Retail Sales MoM Growth August
- Previous: 0.0%
- Forecast: 0.20%
- US Jobless Claims
- Previous: 222K
- Forecast: 225K
Friday, 16/09
- EU Inflation (CPI)
- Previous: 9.1%
- Forecast: 9.1%
Warning
Antonio Atanasov is not an investment advisor. Antonio Atanasov might own shares of companies mentioned in this publication. Always assume him biased. The information provided in this publication – and all other publications by Resource Talks – is impersonal in nature and meant for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple licensed, experienced, and qualified investment advisors. Get numerous opinions before taking your own decision in the end. The minimum risk on any investment mentioned in this publication is 100% loss of capital.
Shortly: you will lose all of your money and possibly most of your brain cells if you listen to talking heads on the internet. Especially if they have orange hair and no experience (me).
Readers are cautioned that this presentation likely contains forward-looking statements about expected future events and the financial and operating performance of any companies potentially discussed herein. Reality often varies from people’s expectations. Managements like over-promising and under-delivering. If a manager was speaking in here, beware. Readers are encouraged to read the Cautionary Note on Forward-Looking Information and to consult the Company’s Annual Information Form, which is available on www.sedar.com. Reading the full disclaimer on the disclaimer page on this website is mandatory.
Timestamps
00:00 Important warning
01:20 Lobo on the macro, gold & silver
23:05 Lobo on copper
28:30 Lobo on which commodities he’s most bullish on
32:14 Regular Portfolios Ep. 4
38:10 Economic calendar for next week
