Fund Managers Are Long Commodities Again
Be careful if you’re heavily long commodities at the moment. The Bank of America survey usually always works as a great contra sentiment indicator. If fund managers are heavily long commodities - prices tend to top out.
Commodities saw their largest monthly allocation increase in history. It really would be interesting to know how much of this new exposure went into cocoa or coffee futures or other related financial instruments.
Managed money bought not only energy but also agricultural commodities and metals.
Meanwhile, according to FMS investors, gold is currently considered the most overvalued since August 2020.
Last week, the investment bank also highlighted who are the main players of the massive central bank gold-buying activity we saw over the last few quarters and years.
As the fear of a delayed interest rate cutting policy by the Fed feeds through the market - managed money takes chips off the table and shifts money from equities into bonds.
Major Weather Event in Dubai
Heavy thunderstorms sent the typically arid United Arab Emirates into chaos yesterday, with Dubai recording more than 5.59 inches (142 mm) of rain in just 24 hours since Monday night — the most in 75 years and equivalent to 1.5x the total seen in a typical year.
The severity of flooding in the Gulf nation’s most populous city may be most strongly attributed to its lack of drainage and incapacity to deal with much rain at all — let alone a year’s worth in 24 hours.
In Other News…
And last but not least a meme that summarizes the current volatility in bond and equity markets.
This week look out for the following:
NAHB Housing Market Index on Monday
FOMC Meeting on Wednesday (expectations are that the Fed will hold rates again at 5,50%)
Philly Fed Manufacturing Index as well as Flash PMI data on Thursday
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Till next Monday, Lukas
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