Stocks Rebound, Rates are Rising and Commodities Have Bottomed

March 13, 2018 11:15AM CDT

Yes, it is true. We can have rising interest rates and stocks moving higher at the same time. Furthermore, we are basing “long-term” bottoms in commodities pretty much across the board. Stocks have been in an unprecedented Super Bull Market for nine years now and investing in stocks has been the only way to get a return on your investments. Rates have been at historically low levels for far too long. Fixed income investors had no returns. Commodities have been in a long-term bear market after the commodity bubble of the early 2000’s finally burst. Remember when crude traded near $150 a barrel? Or silver traded near $50 an ounce and gold toyed with the $2,000 level? Beans in the teens, or $8.00 corn? I’m not calling for that kind of a rally in commodities, however, I am calling for another bull market in commodities that will last for years before we will be able to call it a “bubble”. Not only are commodities way under priced versus their stocks counterpart, but the huge supplies that were created while commodity prices were at all time highs have been drawn down to levels that will be inadequate should we run into any supply interruptions. The global population continues to grow and those economies that are growing the fastest want to elevate their life styles, demanding more of those commodities. People need to eat, and they want to eat better when their wealth grows.

Stocks look to be moving back to all time highs while interest rates will necessarily move higher due to inflation, and commodities will follow.


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