We think that commodities & US equities will diverge

While commodities and US equities often move in the same direction, this is not always the case. We expect poor returns from commodities over the next few years, but reasonable returns from US equities.
Oliver Allen Markets Economist
Continue reading

More from Asset Allocation

Asset Allocation Update

Is US households’ cult of equity a bad omen for stocks?

The record allocation of US households (and non-profit organisations) to equites chimes with the broader evidence that the valuation of the US stock market is high by historical standards. With that in mind, while we are not forecasting a crash any time soon, we do anticipate that returns over the next decade will be substantially lower than they have been over the last one.

11 June 2021

Asset Allocation Chart Book

Prospects for risky assets no longer seem as bright

We are still anticipating an extremely rapid recovery in the global economy over the rest of this year. But even so, it has become more difficult to make the case that returns from risky assets across the board will remain very strong, at least in the near term.

10 June 2021

Asset Allocation Update

Outlook for Treasuries still a threat to US equities

Today’s US Employment Report has failed to awaken the Treasury market from its slumber this quarter. We think, however, that long-dated yields will rise again in due course after their surge earlier in 2021.

4 June 2021

More from Oliver Allen

Long Run Returns Monitor

Long Run Returns Monitor (May 2021)

Our monthly Long Run Returns Monitor provides an updated set of projections for the returns from major asset classes over the next few decades. Given that the period since the previous edition of this document has been a fairly quiet one for financial markets, our latest projections have changed only slightly. We continue to think that the returns from bonds over the next ten years or so will be meagre, those from global equities and DM REITs reasonable, but that those from commodities will be deeply negative.

27 May 2021

Capital Daily

The stock market rotation may have further to run

Even if, as we suspect, the outperformance of the energy and materials sectors soon comes to an end, we expect the broader rotation in equity markets to continue over the next few years.

24 May 2021

Asset Allocation Update

The next phase of the stock market rotation

Although we think that the recent outperformance of the energy and materials sectors will soon come to an end, we still expect the financials sector to continue to fare better over the next few years than sectors, such as information technology (IT), which outperformed during the early stages of the pandemic.

24 May 2021
↑ Back to top