Commodities

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Goldman is predicting commodities will launch in 2019. (26 Nov 2018) Goldman Sachs doesn't exactly have a perfect record with respect to its past commodities predictions, but we do find this one interesting. The $72 billion financial services firm said the upcoming G-20 meeting in Argentina could be the catalyst needed for the beginning of a big uptick—perhaps 17% over the coming months—in commodities overall. Specifically, analysts at the firm claim the markets have not baked any potential thawing of US-China relations into the equation; an event which would certainly help commodity prices. Which commodities will rise the most if Goldman is right? The firm cites soybean as a specific beneficiary of improved relations between the world's two largest economies, as the US exports such a large amount of the product to China. They see oil, which has fallen on worries about trade and a global slowdown, also rising over the coming months. Finally, Goldman predicts that a global economic slowdown would help gold prices—which have fallen nearly double-digits YTD—in 2019.  Our go-to commodities basket is DBC ($15-$15-$19), the Invesco DB Commodity Tracking ETF. The fund, which was up nearly 12% at the beginning of October, is now down 7.22% YTD.

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(26 Nov 2018 update: Gundlach missed the mark. While the markets are flat, commodities are now down 7.22% YTD.)
Jeffrey Gundlach remains bullish on commodities throughout 2018
(30 Jan 2018) DoubleLine founder and CEO Jeffrey Gundlach made headlines in October of 2016 by predicting a Trump victory in the upcoming elections, despite "not being a fan." Now the bond guru is weighing in on commodities. Gundlach predicts stocks will underperform in 2018 relative to commodities, specifically oil and metals. He cites growing global demand and the weak dollar, which he expects to remain anemic over the coming year or two. He has a horse in the race—the DoubleLine Strategic Commodity Fund (DBCMX) trailed the markets by about 50% last year.