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Market – Commodities prices outlook adding to market worries or hope?

Trading room – Thur 15 Nov 2018

The world economy has lost some steam in recent months and is likely to slow much further in the next couple of years according to some recent analyst reports.

According to an analysis in Bloomberg, markets got high on synchronized growth but the buzz is fading and an urgent question taking place is whether the equity markets worldwide can get another fix fast.

Apparently, the omens aren’t great.

According to the report, a slew of barometers, from stock prices and raw commodity materials to computer-chip makers, are now signaling that expansion in major economies is decelerating in concert.

In some cases, these bellwethers are even overshooting recent weak data, raising the possibility that economic indicators are poised to get worse.

Some analysts are calling for “a sustained period of low returns” across equities and credit, with the recent slide in oil highlighting the prospect of easing consumer and industrial demand.

But are all commodities materials falling in sync?

If this is the case, the prospect for those hoping for demand catalysts to lift the market fast from its recent selldown may well fall short.

Locally, on Bursa Malaysia, the Malaysian economy and government revenue may be affected if commodity prices such as crude oil and crude palm oil prices weakened. This may affect the sentiment for the local oil and gas companies and plantation companies as well as sentiment for the local stock market.

On the other hand, a rebound in such commodity prices may boost the appetite for beaten-down commodity stocks in the market.

So, how should one trade commodity stocks such as those in the oil and gas industry, plantation, steel, and rubber gloves, which may be affected by their respective commodity prices?

Obviously, what is the price prospect of the major global commodities currently and going forward?

Our review of the 26 major global commodities price outlook in today’s mPower Algorithm report is giving a very clear indication on how the local equity market and even the global markets may behave in response in the short and medium term.

In fact, those who have been following our commodity tracker would have seen the startling revelation sometime back before the selldown. Are there hopes or worries ahead?

Join us further in mPower Algorithm and mPower Trading and see how we review and trade the market through algorithm and quantitative analytics.


Global commodities latest price outlook

Note: Certain info presented in the tables above has been redacted to comply with the agreement with elite members of the mPower Algorithm program and mPower Trading program and certain institutional clients. The above analysis reflects our personal view only and is subject to terms of use. Please refer to the full report inside for the complete info.