September 13, 2019
As we discussed yesterday, Trump seems to be setting the table for an agreement on a cut-down version of the trade deal … AFTER the Fed cuts rates next week.
That would unshackle the U.S. economy and unleash a boom, especially if he turns to the next pillar in Trumponomics — an infrastructure spend.
With that, the biggest winners over the next twelve months could be commodities.
Copper is the commodity known to be an early indicator of turning points in the economy. And if we look at markets today, copper is signaling this scenario.
Let's take a look at the charts on copper and the broader commodities index.
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Copper has moved 10% in the past nine trading days! But as you can see in the chart above, it remains more than 40% off of the post-global financial crisis highs.
Here's a look at broader commodities … |
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You can see in this chart above, the commodities market has been telling us the world has been in depression (only artificially kept moving by global central bank life support). With some structural reform on the trade front (assuming a cut-down deal), and aggressive fiscal stimulus in the U.S. (already in motion, and likely to be followed in Europe), we should see commodities finally reflect a real, sustainable recovery (i.e. a big recovery in broad commodities prices).
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