Alex Trias

Preview from Europe: Commodities and Equities Telling Two Different Stories

The tale of two asset classes. Commodities and equities can tell a different story over the short run. They have to, because as a rule, markets are lying liars. Inconsistency is really the proof, one of those instances where markets even lie about lying.

But not forever. Oil is flowing into a confirmed downward trend. Some emerging markets are in confirmed upward trends, but starting to buckle. And the US markets are now in confirmed downward trends. The story is getting pretty consistent. It would not be a surprise to see all of these markets retrace their gains over the next few months. My best guess is that earnings season will deliver a few nasty surprises, and that does not augur well for the near term direction in commodities and equities.