This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Macroeconomic Uncertainty Weighed On Commodity Market In October

NEW YORK , Nov. 13, 2012 /PRNewswire/ --  Commodities declined in October as continued macroeconomic uncertainty weighed on markets generally.

(Logo: http://photos.prnewswire.com/prnh/20091204/CSLOGO)

Nelson Louie, Global Head of Commodities in Credit Suisse's Asset Management division, said, "Hurricane Sandy, despite the extreme damage and tragic loss of life, has passed with relatively little impact on commodity markets.  Ongoing macroeconomic uncertainty continues to be the biggest factor weighing on the commodity markets.  At the end of October, politics remained very much in focus in two of the world's most important economies: the United States and China.  Uncertainty remains on what policies will be followed and how they will impact the economy and markets.  Both governments will oversee economies in transition, trying to deal with structural challenges while maintaining burgeoning economic recoveries.  Neither political event will solve any long term structural issues automatically, though increased certainty may be supportive." 

Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added, "Continued quantitative easing in the US, and accommodative monetary policy seen across most key markets, should continue to support the appeal of hard assets as an inflation hedge.  Signs of improved economic growth in the US and elsewhere have not yet dampened central bank enthusiasm for trying to stimulate economic growth, nor caused inflation expectations to increase.  Inflation expectations remain anchored at near historic levels, with markets continuing to focus on weak economic conditions and safety of capital, rather than on protection against the eventual impact of prolonged, exceptionally loose monetary policy on inflation.  We believe investors will continue to benefit from the long-term diversification benefits that commodities provide."

The Dow Jones-UBS Commodity Index Total Return was down by 3.87% in October.  Overall, 17 out of 20 index constituents posted negative returns.  Livestock was the best performing sector, with both Live Cattle and Lean Hogs trading higher.  Energy decreased 2.27% for the month. Crude oil and petroleum products declined despite tensions between Turkey and Syria and lower output at North Sea oilfields.  Hurricane Sandy shut East Coast refineries, roads and airports, reducing crude oil and fuel demand expectations.  Natural Gas was the best performing constituent within the sector, as excess storage levels continued to moderate.  Agriculture decreased 3.33%, with Coffee the worst performer. Sugar also declined following reports of buyers in India and China paying to cancel orders due to existing oversupply. Seasonal harvest progress in the US and better prospects for Brazilian supply also weighed on Soybeans and Soybean Oil.  Precious Metals fell 3.90%. The latest Hong Kong demand data, released for August, was weaker than the previous month and weaker than expected.  This added to worries that Chinese demand may ease.  Industrial Metals was the worst performing sector, falling 9.27%.  Risk appetite weakened amid worsening macro-economic sentiment.  The lack of concrete resolution in Europe and the World Bank's downgrade of its economic growth forecast for China were contributing factors.  Chinese manufacturing data did offer some encouraging signs that activity may be beginning to accelerate.

About the Credit Suisse Total Commodity Return Strategy

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,887.22 -89.09 -0.50%
S&P 500 2,077.91 -8.33 -0.40%
NASDAQ 4,925.7890 -21.6520 -0.44%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs