From the desk of Willie Delwiche.
This week marked the anniversary of Oil busting the theory that there is firm support at $0. Oil is currently trading around $62/bbl, which puts its $100 higher than where it closed on April 20, 2020 (-$38/bbl). Our custom equal-weight commodity index (which is 15% energy and 24% industrials metals, versus 39% & 13%, respectively, in the CRB index) continues to power higher, eclipsing not only its early 2021 peak but the 2012-2014 peaks as well. While Lumber gets a lot of headlines for making new highs - strength in commodities is much broader than that. While this may lead to some concern about rising inflationary pressures, it also says positive things about global growth and the prospects for global equities. You don’t need to be a commodity trader to appreciate & benefit from the current strength in commodities.
