Thursday, May 5, 2011

GaveKal's 5 Reasons Why Commodities Are Suddenly Tanking

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Analysts at GaveKal Research have come up with a really great list of 5 reasons commodities are suddenly starting to slide.

Here's our summarized rundown:

  • The Glencore IPO has everyone thinking this is a Blackstone-like top in the commodities market. (Josh Brown has been all over this one)
  • The fact that silver is sliding even with a weak dollar reminds everyone that all commodities are vulnerable.
  • Across all markets, "leadership" is narrowing. (See our recent COTD).
  • Fiscal stimulus is being removed in China. (See this report from China).
  • A recent IMF report indicated that Asia-Pac is still very early in the tightening cycle, and still generally in an expansionary fiscal position that needs to come down.

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