January 2019

<strong>Commodities Are Favored vs. U.S. Dollar and Stocks in 2019</strong> (Bloomberg Intelligence) -- After divergent strength despite the significant headwind of a strong greenback in 2018, commodities are set to take the bull baton from the dollar and stock market in 2019. It should play out positively for commodities, with elevated mean-reversion risks in the trade-weighted broad dollar at the highest end-of-year level ever, an extended stock-market bull showing exhaustion and subsiding Federal Reserve tightening. Metals, notably gold and copper, should be primary beneficiaries of a peak greenback. Agriculture, the strongest sector in 2018, is ripe to appreciate on some normalization in historically strong Corn Belt yields. West Texas Intermediate should pivot around $50 a barrel. Ending 2018 at a discount to that level favors recovery. Sustained dollar strength is a primary commodity risk in 2019.