Chart o’ the Day: The Stocks / Commodities Disconnect

This disconnect is certainly one of the more remarkable features of the risk-on rally since 2011.

Here’s an illustration from Julian Jessop at Capital Economics via FT Alphaville:

stocks vs commodities

It seems as though this makes no sense at all – shouldn’t commodities be benefiting from the same easy money policies as stocks are? – but the explanation can be found, according to Jessop and FT’s Paul Murphy, in the weakness of China:

The moves are logical. Stocks are up because of rampant QE, which is squeezing investor flows out of bond markets and into equities. And the reason we’ve got rampant QE is the continued lack of near-term economic recovery globally, which is manifestly bad for industrial commodities.

Jessop notes that industrial metals are particularly sensitive to Chinese growth prospects and it seems noteworthy that Shanghai is one stock market that is not rising at present…

Source:

That equities / commodities disconnect (FT Alphaville)

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. w88 commented on Sep 20

    … [Trackback]

    […] Find More here on that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]

  2. kid commented on Sep 25

    … [Trackback]

    […] Find More on that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]

  3. 스포츠토토 commented on Sep 26

    … [Trackback]

    […] Find More Info here to that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]

  4. 918kiss commented on Sep 28

    … [Trackback]

    […] Info to that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]

  5. onion social network commented on Oct 11

    … [Trackback]

    […] There you will find 89414 additional Info to that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]

  6. etudiante occasionnelle geneve commented on Oct 18

    … [Trackback]

    […] Find More on to that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]

  7. sell cc commented on Oct 31

    … [Trackback]

    […] There you will find 85241 additional Info to that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]

  8. mơ thấy đi trên nước commented on Nov 03

    … [Trackback]

    […] Read More on to that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]

  9. bmo online banking sign in page commented on Nov 12

    … [Trackback]

    […] Find More to that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]

  10. dumps hight balance commented on Nov 16

    … [Trackback]

    […] Find More here to that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]

  11. home work commented on Nov 23

    … [Trackback]

    […] Read More on on that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]

  12. Regression Testing Definition commented on Dec 01

    … [Trackback]

    […] There you will find 35214 more Info to that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]

  13. scotiabank online banking login commented on Dec 05

    … [Trackback]

    […] Read More on that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]

  14. copy cheap knockoff panerai watch commented on Dec 08

    … [Trackback]

    […] Find More to that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]

  15. DevSecOps as a Service commented on Dec 21

    … [Trackback]

    […] Information to that Topic: thereformedbroker.com/2013/05/14/chart-o-the-day-the-stocks-commodities-disconnect/ […]