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Speaker 1: Global business news twenty four hours a day at Bloomberg

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Speaker 1: dot com, the radio plus Globile lapt had on your radio.

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Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters.

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Speaker 1: I'm Charlie Public, the SMP NEZDAK are all advancing and

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Speaker 1: uh we are looking at an update for stocks. Let's

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Speaker 1: head over to the First Word breaking news desk for

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Speaker 1: today's afternoon call. There he is Bill Maloney. Good afternoon, Charlie.

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Speaker 1: Stocks have been strong from the start, with the Dow

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Speaker 1: currently hired by a hundred and twenty six points, SIPs

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Speaker 1: game twelve and NAZAC rises thirty two. Yelling seas rates

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Speaker 1: rising gradually but avoided precise timing. The small gap six

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Speaker 1: hundred is hired by nine points and the US ten

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Speaker 1: yield at one point seven to per cent. Eight out

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Speaker 1: of tennis to B sectors are higher, led by games

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Speaker 1: and energy materials, and the financials, utilities and telecom fell down.

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Speaker 1: Transports rise forty seven, as a biotechs game forty nine,

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Speaker 1: and the vix is hire by one percent. Dowlutes to

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Speaker 1: the upside included Boeing, Nike, and Caterpillar Home Depot led

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Speaker 1: to the downside at VFEL four eight percent on low

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Speaker 1: survival data for lung cancer drug. We'll see if industry

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Speaker 1: has gained eight percent was raised to buy over at

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Speaker 1: c ls A live from the first breaking news tasks

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Speaker 1: on Bill Maloney. Charlie all right, thank you very much,

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Speaker 1: Bill Maloney, and to hear live breaking news over your

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Speaker 1: Bloomberg tipe squawk squ a w K on your terminal.

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Speaker 1: I'm Charlie. That's a Bloomberg business flash. This is taking

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Speaker 1: stock with Gathlee Mays and grim Box on Bloomberg Radio

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Speaker 1: weakness and commodities. That was one of the biggest features

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Speaker 1: helping to drive markets around the world as went into

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Speaker 1: But our next guest says, now it looks like those

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Speaker 1: commodities may have definitively bottom. We're very happy to welcome

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Speaker 1: back to the show, Jodi Gunnsberg. She's global head of

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Speaker 1: Commodities at SMP DOWD Jones in diseased. Jody, welcome back.

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Speaker 1: Thank you for having me. Well, I can start with

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Speaker 1: oil because that is certainly the commodity on just about

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Speaker 1: everybody's radar screen. Is consumers and investors crewed hitting a

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Speaker 1: seventh month high in London on signs that the global

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Speaker 1: gut that has been such a big downward pressure on

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Speaker 1: oil is contracting more quickly than projected. It is, and

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Speaker 1: it's coming um, you know, as opposed to many people

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Speaker 1: feeling like there's a slowdown in Chinese demand growth. That's

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Speaker 1: really not driving oil UM. What we're watching is the

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Speaker 1: key swing factors on the demand side is the strong

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Speaker 1: demand um coming from India. In fact, it's taken over

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Speaker 1: China's post the biggest demand growth in the world. And

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Speaker 1: on the supply side, we're really watching the declines in

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Speaker 1: the US inventories, which are starting to happen as the

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Speaker 1: producers have begun um cutting back. And more broadly, UH,

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Speaker 1: I just want to you know, look at UH commodities,

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Speaker 1: you know, losing one percent per day in the first

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Speaker 1: twelve trading days of SI. That was a lot because

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Speaker 1: of this big focus on China, but they're now up

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Speaker 1: almost thirty percent off the bottom you point out in

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Speaker 1: a recent report, and they just posted their biggest three

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Speaker 1: month gain of eighteen percent, the biggest in July two

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Speaker 1: thousand nine. So it's not just oil commodities broadly. Well,

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Speaker 1: I would say that this could be considered a year

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Speaker 1: of extremes of nothing else because um, as you just mentioned, yes,

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Speaker 1: we had the worst start this year to any year,

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Speaker 1: losing more than a percent a day in the first

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Speaker 1: twelve dating trading days, and then off the bottom, it's

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Speaker 1: been the fastest rebound ever. Uh. The index gained almost

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Speaker 1: nine percent in just forty days off the bottom in January.

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Speaker 1: Now they're up almost thirty percent off the bottom and

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Speaker 1: posted their biggest three month gain over eighteen percent since

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Speaker 1: July two thousand nine when they returned. And the reason

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Speaker 1: that this is so important is because we've only seen

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Speaker 1: gains this big happen at other bottoms, and at all

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Speaker 1: of the other bottoms we've seen gains this big, Well,

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Speaker 1: it's very important. Commodities are now beating stocks, out performing

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Speaker 1: stocks for the first year since two thousand seven. Your

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Speaker 1: research shows that when this starts happening, this trend can

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Speaker 1: go for a while. It can. We saw the longest

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Speaker 1: stretch of equity outperformance over commodities ending in that was

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Speaker 1: eight years straight. The last time we saw that long

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Speaker 1: of a stretch even close with seven years eighty from

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Speaker 1: the eighties six. When the cycle switched for the following

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Speaker 1: three years, commodities returned almost three outperforming stocks every year

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Speaker 1: through ninth nine. So is this a good time to

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Speaker 1: invest in commodities? Well? As the uncertainty around stocks continue

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Speaker 1: and investors might look for an asset class with potentially

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Speaker 1: similar returns and risk profiles over the long term, it

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Speaker 1: could be a good time to switch. And and particularly

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Speaker 1: from the uncertainty is um around the Brexit vote, the

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Speaker 1: week unemployment numbers, the flow GDP growth, these are all

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Speaker 1: concerning points that may continue to hurt stocks. But from

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Speaker 1: the commodities perspective, there's still a minimum floor for the

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Speaker 1: basic natural resources and seasonally as we enter the summer,

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Speaker 1: the commodities tend to perform well from the increased consumption

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Speaker 1: across the board, from food to construction to gasoline. And

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Speaker 1: now we've got an extra added benefit from the post

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Speaker 1: Almeno period. And Jennie the Faid Janet Ellen sounds like

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Speaker 1: she's in no hurry to raise the key rate. Ward

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Speaker 1: McCarthy from Jeffreys on the show today saying that that

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Speaker 1: that next rate increase doesn't come till September at the earliest.

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Speaker 1: Does that help commodities says, to help this rally? Uh,

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Speaker 1: what are the rates increase or not? Is mixed for

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Speaker 1: commodities at this point. I don't think that it's a

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Speaker 1: major factor driving commodities because it's been so well telegraphed um.

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Speaker 1: But historically, rising a rate or high interest rate environments

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Speaker 1: are good for commodities because they increase the expected inflation

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Speaker 1: plus the real rate of return, and they also add

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Speaker 1: on to the collateral return from the commodities investments gold.

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Speaker 1: What's gold going to do? Is gold going to hit

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Speaker 1: the previous highs? Well, investors love to feel the safety

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Speaker 1: of gold in in the volatile times, and um not

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Speaker 1: only for the factors that I had just mentioned, but

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Speaker 1: um also the extra uncertainty and volatility coming around the

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Speaker 1: election year is making the demand for gold pick up.

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Speaker 1: And based on the history three again, if I look

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Speaker 1: at the path index performance, it looks like gold could

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Speaker 1: go well into the eighteen hundreds. Wow, and gold training

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Speaker 1: today's spot golds at twelve forty eight and change. So

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Speaker 1: there's still a ways to potentially go if gold continue

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Speaker 1: this pattern in the volatile time. Jodi Gunsberg, thank you

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Speaker 1: so very much. Commodities are in rally mold, They're beating stocks,

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Speaker 1: and this trend could continue for a while. She's Global

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Speaker 1: head of Commodities at SMP Dow Jones in disease. Great

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Speaker 1: show today, in a great couple of shows coming up Orlando, Florida,

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Speaker 1: Pershing Insight sixteen. More than two thousand investment professionals around

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