Here’s Why You Should Consider Futures Markets…Again

October 9, 2018 12:05PM CDT

First, let’s look at the Equity Markets, it’s been too easy for far too long. We are now in the midst of the longest bull market run in history, not that time alone should be a reason for the bull market to end. We have not even seen a meaningful correction to test whether the market is truly strong. Most of the rally has been based on easy monetary policies. Historically low interest rates have made the equity markets the only game in town, there’s been no other way to get a return on investment in the markets. Equity traders don’t feel a “need” to hedge with futures anymore because the market keeps making new all-time highs. Things are now changing, and the equity markets are coming under pressure by rising interest rates, treasury yields are at ten-year highs. Equities are no longer the only game in town, it’s time to start using futures to hedge portfolios.

Suddenly, we have an economy that is really heating up; Consumer confidence, manufacturing confidence and GDP now above 4.0% are good indicators of a very strong economy. Commodities are a great way to hedge inflation because they are undervalued. Grain markets have been beat up by the trade war with China. Gold, silver and platinum are good long-term buys at these current prices. Coffee, cocoa and sugar are all at attractive levels too.

I think that it’s time to start looking for under-valued commodities.

Futures Chart

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.