Earnings season is underway, featuring Big Oil companies and heavy-machinery maker Caterpillar Inc. Five significant charts for the global commodity markets include insights on oil production growth, silver’s price surge, Brazilian corn harvest impact, peak LNG demand in Europe, and Caterpillar’s influence on mining and construction industries. These highlights provide valuable indicators for market trends.
Silver demand exceeded supply for the third consecutive year in 2023, leading to a significant structural deficit of 184.3 million ounces, despite a 7% decline in total silver demand. Industrial demand, particularly in green applications, set a record, with expectations of further growth. Silver investment demand fell, but the Silver Institute projects a 2% demand increase in 2024.
McAlinden Research Partners discusses the potential for a commodities supercycle. Despite stock market strength, commodities are varied, impacted by geopolitics and cycles. Factors include inflation, job market trends, US dollar strength, and 2024 election impact. While not at the supercycle’s beginning, it may be on the horizon. ETF options are limited, but some offer potential.
The major oil benchmarks have experienced significant fluctuations, with potential concerns over supply disruption due to Middle East conflict. Investors seeking energy exposure and income should consider Master Limited Partnerships (MLPs). Notable MLPs include Enterprise Products Partners, Energy Transfer, Hess Midstream, Mach Natural Resources, MPLX, and USA Compression Partners, offering high dividend yields and stable distributions.
The 2024 edition of Morningstar’s Best Companies to Own focuses on companies with wide moats and strong environmental, social, and governance (ESG) management. The ESG Risk Rating considers exposure and management, with companies like Keysight Technologies, RELX PLC, and Accenture receiving strong ratings. While not all are immediate buys, they offer long-term sustainability.
In his analysis, Michael Ballanger discusses the gold and silver market’s current state, recalling an anecdote about a client’s misguided investment in silver. He emphasizes the historical relationship between gold and silver, emphasizing the unpredictability of silver’s performance. Despite losses, the client ultimately shifted to bonds and utility stocks.
The real estate and REITs sector has been making frequent negative headlines, but the outlook for REITs is more positive than suggested. Data centers and AI are driving growth in the sector, with record investment in renewable energy creating a favorable environment for further data center construction. This trend may appeal to investors seeking diversification.
MBIA Inc. experienced a significant cash release and one-time dividend following insurance regulations approval. The company’s National subsidiary displays strong financial standing, hinting at potential future liquidity releases. Despite risks, further payouts are anticipated, offering a 10% to 60% share upside. The recent $500 million dividend signals positive prospects amid ongoing de-risking efforts.
eXp World Holdings (NASDAQ:EXPI) is a cloud-based real estate brokerage challenging the traditional brick-and-mortar model. Despite its appealing business model and potential for a housing market recovery, concerns about market weakness and high valuation prompt a bearish outlook. Anticipated interest rate declines may boost market activity, but EXPI’s high valuation remains a risk, leading to a SELL rating.
Paramount Global (NASDAQ:PARA) faces complex asset transfer, likely involving contentious negotiations. Non-voting shareholders may fight for better terms. Despite decreased share price, the assets retain value, prompting a shift from negative to neutral/hold rating. Expect increased share price volatility. Market uncertainties and debt burden complicate potential sale. The outcome remains uncertain. (Words: 50)
The article discusses the addition of Perdoceo Education (NASDAQ: PRDO) to the author’s portfolio, acknowledging regulatory risks but highlighting the company’s focus on technology, mature student demographic, and potential for growth through corporate partnerships. The author rates PRDO as a “Strong Buy” and has taken a medium-sized position due to regulatory risks despite the company’s initiatives to address them.
Short-term commodity options, with shorter tenors and lower premiums, are gaining popularity among traders amid market volatility. Factors like rising interest rates, weather events, and geopolitical risks have increased commodities price volatility, making short-term options a flexible tool to manage risks. The expanding listing of expiration dates offers customization opportunities for traders, reflecting the market’s need for flexibility.
The iShares MSCI Saudi Arabia ETF (KSA) tracks the Saudi Arabian IMI index, heavily tied to financials and oil-related sectors. Saudi plans to diversify from oil and attract expats while boosting tourism, reflecting in financial growth. However, PE and expense ratio issues raise concerns, with reliance on external economic factors and oil prices affecting the economy.
Mish Schneider, Chief Strategist at MarketGauge.com, shares a positive market outlook. She emphasizes the strong consumer spending trend and suggests sectors like biotechnology and commodities, particularly precious metals, as promising. She also discusses the impact of technology on the market and expresses bullishness with a cautious outlook due to geopolitical factors and the upcoming presidential election.
