Commodities

New Fed Chair, Kevin Warsh, is betting that an AI-driven productivity acceleration will get the Fed out of jail for persistently missing its 2 percent inflation target. But history informs us that while new technology adoption is exponential, total productivity growth is not. So, if Warsh’s bet goes wrong, as is likely, the US inflation overshoot will persist. We discuss the investment implications. Plus, a new trade is short cotton.

In Section I, Doug compares projected S&P 500 earnings and current capex to past cycles at the same stage of their expansions while also exploring the K-shaped bifurcation in business investment. In Section II, Mathieu argues that Australia and Canada are unloved, undervalued, and on the cusp of a structural re-rating. Long-term investors who wait for the catalysts to become obvious will miss the entry point.

This Special Report argues that Australia and Canada are unloved, undervalued, and on the cusp of a structural re-rating. Long-term investors who wait for the catalysts to become obvious will miss the entry point.

The Iran war has damaged LNG production capacity and halted tanker flows through the Strait of Hormuz. We assess the conflict's impact on LNG markets over cyclical and structural horizons.

In this report, we deviate from our base case and instead assume that there is an immediate improvement in Hormuz traffic. This exercise allows us to explore how the global oil supply shortfall could eventually be offset if the right conditions are in place.

The Iran war provides a timely motivation for examining how the main financial asset classes and commodity sectors perform across different inflation regimes and during periods of elevated geopolitical risk.