Returns from commodities and US equities to diverge once again – CE
|While commodities and US equities often move in the same direction, this is not always the case. Analysts at Capital Economics expect poor returns from commodities over the next few years, but reasonable returns from US equities.
See – S&P 500 Index: Earnings optimism set to constrain the upside – CE
Commodities and US equities set to diverge
“We do not expect commodities to collapse by as much as they did in 2014-15 over the next few years. Meanwhile, we think that the returns from US equities will be positive, but far from stellar.”
“We will see a strong global recovery, but one in which China’s economy loses steam as stimulus is withdrawn. We also expect commodity supply to recover markedly, as vaccines allow many mines to reopen, and much of the oil supply taken offline earlier during the pandemic comes back.”
“If we are right to expect a strong global recovery, but one in which growth is softer in some commodity-intensive parts of the world, along with a rebound in commodities supply, it seems perfectly plausible to us that the returns from commodities and US equities could diverge once again.”
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