S&P GSCI Commodities Index Shows Biggest Surge Since 1990

In May, one of the broadest commodities indexes—the S&P GSCI—produced its biggest one-month gain since Iraq invaded Kuwait in September 1990.

The S&P GSCI increased 19.67% in the month. That compared to a gain of 22.94% in September 1990, according to Standard & Poor's, which released the results on Tuesday. (See table below.)

"Solid commodity gains in May were attributed to most commodities accelerating the recovery process from the sharp declines experienced during the second half of 2008 and first quarter of 2009," said Michael McGlone, S&P's director of commodity indexing in a statement.

Year-to-date through May, the S&P GSCI had registered a total return of 5.95%, led by strength in the energy and agriculture sectors.

Sparked by price increases in unleaded gas and crude oil, the S&P GSCI Energy Index increased 25.44% on the month for a year-to-date gain through May of 4.38%. The S&P GSCI Agriculture Index was the second-best-sector performer last month, increasing 12.37% for a year-to-date gain of 8.18% heading into June.

Metals also performed well in May. The S&P GSCI Precious Metals Index gained 11.41%, putting it up 12.71% for the year. The S&P GSCI Industrial Metals Index increased a more modest 5.82% on the month. But it has been the strongest year-to-date sector performer with a gain of 22.23% (led by a 55.72% increase in copper) through May.

click to enlarge

--- This article was submitted by IndexUniverse's Murray Coleman.

Original post

Comments

[Sovestor:]

Bottom line is: emerging markets will outperform developed markets in the near-term and long-term. We consider this as one of the clearest recognizable macro trends. This is such as simple trend to know that we wonder why people need to invest in mutual fund managers.

Jun 03 06:40 PM

[Mad Hedge F...:]

It's been wonderful. If you have been aggressively long commodities of every size, shape, color, and flavor, as I have been all year (www.madhedgefundtrader...), then you just had one of the best trading months of your career. The CRB index rocketed by 17% in May, the best move since the early days of the first oil shock in 1974. That year I spent weekends driving my Volkswagen van from Los Angeles down to Mexico, where I filled it with jerry cans of gasoline because it was still selling for 25 cents a gallon there (an early attempt at arbitrage). I finally sold the vehicle and used the cash to buy a one way ticket to Japan (Remember that John E?). My favorites went up the most. Crude leapt 29%, Silver clocked in a 23% return, and gold was up 9%. The producing stocks also did spectacularly well. Coal producer Massey Energy (MEE) soared by 44%, dragged up by oil, while my beloved Freeport McMoran (FCX), with the world’s largest gold and silver reserves, rose by 30%. While these things are all superheated on a short term basis, the ten year agreements are still good. You can find massive Chinese buying behind almost every one of these. Hmmmm, I wonder if those bell bottoms still fit.

Jun 03 09:10 PM