Navix Financial's expertise in financial markets extends to commodities. They can offer valuable insights into the dynamics of various commodities, including supply and demand trends, geopolitical factors, and global market influences. This expertise helps investors make informed decisions in this volatile market.
One way Navix Financial can assist in commodities investment is by providing access to a diverse range of commodities. This could include investment vehicles such as commodity futures, exchange-traded funds (ETFs), or structured products tied to specific commodities, enabling investors to diversify their portfolios.
Commodities are often used as a diversification tool in investment portfolios. Navix Financial can assist in structuring portfolios that include commodities alongside traditional assets like stocks and bonds. This diversification may help reduce overall portfolio risk through exposure to non-correlated assets.
The S&P 500 is about as stretched vs. global GDP as the 2000 peak and the commodity-to-stock index correlation is near the highest ever, which may portend deflation risks in 2024. Our graphic showing the Bloomberg Commodity Spot Index (BCOM) declining and S&P 500 rising in 2023 appears unsustainable, particularly if the US follows recessionary leanings in Europe. Deteriorating economic growth and the property crisis in China, and the Conference Board’s leading indicators index at minus 7.6%, may be grounds for commodities to continue a normal downward reversion path following the high-velocity rally to the 2022 apex.
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Gold near the top of our annual macro performance scorecard and the Bloomberg Commodity Spot Index on the bottom is a global recessionary trajectory. The potential for trend reversal or acceleration is a key question for 2024, and our bias is the latter. What appears unsustainable are falling Treasury bond and rising stock-market prices, especially with 2024 US recession outlooks from Bloomberg Economics and the Conference Board’s index of leading indicators. The US economy has been resilient in 2023, but so has central bank vigilance, and it may not be until 3Q24 that coordinated rate hikes from 3Q will be fully felt.
Another global recessionary signal is that energy is at the bottom of our commodity-sector annual performance scorecard and precious metals are on top. A primary spark that may accelerate this trend is a typical US stock-market drawdown for a recession. If that can be avoided and Europe and China rebound from sliding growth — on the back of the most aggressive global central-bank tightening period ever, which may not have ended in 3Q — commodity prices could stabilize in 2024.
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