“Dr Copper” as an economic measure is becoming popular again, but where has it been the past 8yrs when the US economy has been in an uptrend since 2009 as shown by IndProd.
David Einhorn Buys Three New Stocks: These Are The Names And Theses (Q3 Letter)
David Einhorn's Greenlight Capital funds returned 5.9% in the third quarter of 2020, compared to a gain of 8.9% for the S&P 500 in the same period. This year has been particularly challenging for value investors. Growth stocks have surged as value has struggled. For Greenlight, one of Wall Street's most established value-focused investment funds, Read More
Commodity prices are priced in US$ globally and cycle pricing is more about the Trade Weighted US$ and global capital flows than anything else! Global capital flows are shifting back to Intl markets as the US$ foreign policy swings back towards support for Democratic institutions after a period of support withdrawal. The US$ is beginning to return to its long-term trend and commodity prices are rising as a result. Oil prices which normally rise during periods of political stress fell with North Korea’s threats as there was a brief period of capital flows back into the US seeking safety with the ‘saber rattling’. Now that fear of military action appears to be behind us, the US$ appears to be resuming its return to the long-term trend.
The fear inspired by the Russia’s Ukraine invasion, the rise of ISIS and global terrorism resulted in a sharp rise in US$ in 2014-2016. US foreign policy has begun to reassert global Democratic protections. As investors perceive this to be effective, we can expect the Trade Weighted US$ Major Currency Index to fall another 25% from current levels as global capital flows normalize.