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  • Interesting call from david Rosenberg: Long Bonds/Commodities 0 comments
    Aug 31, 2009 2:56 PM | about stocks: SPY, IVV, IWM, LQD, CUT, USL

    If you are not reading David Rosenberg's (ex Merrill Chief Strategist) Daily Market Musing & Data Deciphering, you should start:  From today's note:


     In deflationary times, it pays to identify who has the pricing power and in the current context that means primary producers. So in addition to credit, commodities have also been an effective way to express a cyclical view this year. But commodities are more sensitive to global growth than is the case for equities, or corporate bonds for that matter, since Asia is the marginal buyer of basic materials. Our analysis shows that the CRB index is discounting between 2.5% and 3.0% global growth for the coming year, not wildly off the 2.0% consensus forecast despite oil prices more than doubling from the lows of earlier this year. In fact, the energy complex is only priced for 1.75% global growth versus 2.25-2.50% for forest products, and 3.00-3.25% for the base metals. So the oil price, followed by lumber/paper products would seem to have greater upside potential currently than say, copper and nickel. 

    Well I'd like to see how good David is at timing these type of picks.  So I think he's basically putting this trade together for us. Short equities which I'd do through SPY and IWM, long bonds which I do through LQD, and long oil USL, timber through CUT

    Let's see how we do...

    Stocks: SPY, IVV, IWM, LQD, CUT, USL
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