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Commodities And Equities Are Telling Different Stories

Published 12/02/2020, 09:20
Updated 09/07/2023, 11:32

Equities, seemingly unmoved by the outbreak of the coronavirus, are already up more than 5% in euro terms since the beginning of the year. Commodities, however, are down almost 8%.

Part of this gap can be explained by the fact that the epicenter of the coronavirus – or COVID-19, as the WHO has officially named it – is in China, which is by far the biggest consumer of all the major raw commodities. Yet, the return difference between the two asset classes remains striking – especially as the new equity highs are partly due to a strengthening of economic momentum that began before the outbreak. Normally, this would bolster commodity prices as well.

The risk of equity market complacency surrounding the coronavirus is not entirely negligible.

Global Equities Vs Commodities

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