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September 24th, 2012
Commodity Investors – Goldman Sachs Group Inc. forecasts an 18.2 percent return from commodities in the next 12 months, with energy and industrial metals leading the way.
The Standard & Poor’s GSCI Enhanced Commodity Index gain will include 26.5 percent for energy, 10 percent for industrial metals and 6 percent for precious metals, Jeffrey Currie, an analyst at Goldman Sachs, said in a Sept. 21 report. In three months, the gauge will be up 8.6 percent, beating equities, 10- year government and five-year corporate bonds, cash and the euro and yen against the dollar, according to the report.
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March 7th, 2012
Dow Jones Futures – Record volatility in stocks pushed investors to the safety of large companies and handed the Dow (INDU) Jones Industrial Average the best risk-adjusted return since the bull market started in 2009, the first time the gauge has led a comparable recovery.
The BLOOMBERG RISKLESS RETURN RANKING shows the 30-stock Dow rose 5.9 percent from the market low on March 9, 2009, through yesterday when adjusted for volatility, the highest out of nine American benchmark equity gauges. Never before has the measure led a rebound in the three years after a market bottom, according to data compiled by Bloomberg and going back to 1966.
Investors, reeling from the widest price swings in equity market history in 2008, sacrificed returns for the stability of large companies such as Caterpillar (CAT) Inc. and their global revenue streams, as selloffs in May 2010 and last August cast doubt on the recovery and kept volatility elevated. Options show investors are betting the Dow will continue to be stable as Europe’s sovereign-debt crisis, the growing U.S. government debt and a slowdown in emerging markets overshadow the best stock- market start since 1998.
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March 7th, 2012
S&P 500 Futures – U.S. stocks advanced, following the biggest decline in 2012 for the Standard & Poor’s 500 Index, after a private report showed American companies increased hiring and more investors signed on to a Greek debt swap.
Equities extended gains on a report that the Federal Reserve is discussing a new type of bond-buying program. Financial and industrial shares rose the most among 10 groups in the S&P 500. Bank of America Corp. (BAC) and Caterpillar Inc. (CAT) added at least 2.2 percent. Apple (AAPL) Inc. gained 1 percent as it’s said to unveil today the third generation of its iPad tablet computer. Ciena Corp. (CIEN), a maker of network equipment for phone companies, surged 7.2 percent amid a higher revenue forecast.
The S&P 500 rose 0.7 percent to 1,352.90 at 12:54 p.m. New York time, after slumping 1.5 percent yesterday. The Dow Jones Industrial Average added 77.05 points, or 0.6 percent, to 12,836.20. The Russell 2000 Index gained 1 percent to 794.79. About 3.1 billion shares changed hands on U.S. exchanges.
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March 6th, 2012
Natural gas futures edged higher on Tuesday, as traders closed out bets on lower prices to lock in gains following the previous session’s 5% plunge, but most market participants expected prices to retest a ten-year low hit in late-January.
On the New York Mercantile Exchange, natural gas futures for delivery in April traded at USD2.369 per million British thermal units during U.S. morning trade, adding 0.62%.
It earlier rose by as much as 1.5% to trade at a session high of USD2.394 per million British thermal units.
Natural gas prices lost 5.2% on Monday to settle at USD2.348. But prices regained modest strength as traders covered short positions, or bets that prices will fall, a move known as short covering.
Investors also positioned themselves in case major U.S. natural gas producers announce a production cut in response to lower prices.
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March 6th, 2012
Soybean futures rose to a fresh five-month high on Wednesday, amid indications demand from top consumer China will remain strong in the near-term, while investors readjusted positions ahead of Friday’s closely-watched U.S. government report on global soybean supplies.
On the Chicago Mercantile Exchange, soybeans futures for May delivery traded at USD13.3862 a bushel during European morning trade, edging up 0.32%.
It earlier rose by as much as 0.4% to trade at USD13.3875 a bushel, the highest since September 23.
Soybean prices have gained in nine of the last ten trading sessions leading up to Wednesday.
Futures have rallied almost 11% since the beginning of February, as traders focused on distressed crops in major South American soy growers and on hopes demand from top consumer China will remain robust in the near-term.
China’s northeast province of Heilongjiang, the country’s top corn and soy grower, aims to expand its corn acreage by paring back on land for soy crops in an effort to raise total grains output by 8% in 2012.
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March 7th, 2012
Crude oil climbed from the lowest price in more than two weeks in New York on forecasts that gasoline supplies are falling and employment increasing in the U.S., the world’s biggest consumer of crude.
Crude oil futures gained as much as 0.9 percent before government data today that may show motor-fuel inventories slipped by 1.6 million barrels last week. Stockpiles decreased 2.25 million barrels, the most since November, the industry-funded American Petroleum Institute said yesterday. U.S. employers probably added 210,000 jobs in February after gaining 243,000 in January, according to a Bloomberg survey before a March 9 report.
“U.S. economic figures have been surprisingly good, and this of course helps commodities,” said Hannes Loacker, an analyst at Raiffeisen Bank International AG (RBI) in Vienna who predicts U.S. crude will average $104 a barrel this quarter. “So hopefully this will continue.”
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March 6th, 2012
Commodity Brokers: Barclays Plc (BARC) and JPMorgan Chase & Co. (JPM) have become top players in global commodity derivatives trading, catching up with long-time leaders Goldman Sachs Group Inc. (GS) and Morgan Stanley. (MS)
The two banks tied Goldman Sachs and surpassed Morgan Stanley in the share of clients who use them for over-the- counter energy derivative trades, a Greenwich Associates survey of corporate treasury officials shows. In metals derivatives, JPMorgan dominated with a 60 percent market penetration.
“JPMorgan and Barclays, if you think about the longer-term trend, have gotten to the point where they’re now on a level footing with Morgan Stanley and Goldman Sachs,” Andrew Awad, a Greenwich Associates consultant who helped write a report on the findings, said yesterday in a phone interview.
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February 10th, 2012
U.S. corn stockpiles in the 2011-12 marketing year will tighten further and price gains will outpace increases in other commodities in six months, Goldman Sachs said.
Corn will rise 9 percent in six months, Goldman said in an e-mailed report dated yesterday. U.S. inventories are expected by the U.S. Department of Agriculture to fall to 20.3 million metric tons, the lowest level in 16 years. Global stockpiles may fall to the lowest since 2006-07, according to the USDA. Soybeans may gain 6 percent to $12.90 a bushel on reduced South American production, Goldman said.
“We expect further tightening of the 2011-12 U.S. corn balance, lower South American corn and soybean production and a 2012-13 U.S. soybean balance in deficit,” New York-based analyst Damien Courvalin said. “Corn prices will remain high relative to other crops in coming months in order to secure sufficient acreage gains in the U.S. to help rebuild U.S. inventories.”
Corn futures have declined 11 percent in the past year, partly on speculation that demand would decline amid economic crises in the U.S. and European Union. Soybeans declined 15 percent and wheat has plunged 26 percent.
Soybean acreage may suffer as farmers plant corn in the U.S., Goldman said. Dry weather in Brazil and Argentina will reduce production of both crops, improving export demand for inventories from the U.S., according to the report.
Because of the increased corn planting in the U.S., the biggest exporter of the grain, prices may decline after the harvest in August and September. Gains in soybean futures are expected to outpace corn in the 12-month timeframe, Goldman said in the report. Corn may drop to $5.25 a bushel in a year while soybeans may rise to $12.90 a bushel.
- Tony C. Dreibus in London at Bloomberg.