Golden Age Dawns On Commodities

• 3 min read
Golden Age Dawns On Commodities

MARKET MOVERS

  • FTX CEO acquires 7.6% stake in Robinhood. An entity called Emergent Fidelity Technologies took a 7.6% stake in Robinhood worth $648 million. Sam Bankman-Fried, who leads the Bahamas-based crypto company FTX, is the sole director and majority owner of Emergent. The stake makes Emergent the third-largest Robinhood shareholder, FactSet data shows. Robinhood shares jumped 26% after the announcement.

  • Tether regains dollar peg after $3 billion in withdrawals. Tether now has a circulating supply of around $79.5 billion, down from $82.9 billion 24 hours. suggesting the company behind it processed over $3 billion in redemptions in just one day. Paolo Ardoino, Tether’s chief technology officer, took to Twitter to reassure investors about the soundness of his company’s stablecoin.

  • Luna crashes to $0 as UST falls further from dollar peg. UST lost its peg and on Friday was trading at around 14 cents, according to data from CoinGecko. TLuna, a token closely associated with UST, is now worth $0 as a result. The extreme market volatility has put UST to the test and it has been unable to maintain the peg. Adding further complications is the fact that the Terra blockchain twice in less than 24 hours.
    Read more here.

  • Leading index for commercial real estate rises in April. The Dodge Momentum Index (DMI) moved 6% higher in April to 164.8 (2000=100), up from the revised March reading of 155.0. The main impetus behind this trend is the commercial sector, which has been driven by a growing number of data center, warehouse and hotel projects entering the planning queue. The institutional component has made moderate improvements as well. Read more here.

  • Lumber prices tumble to the lowest level of 2022. Lumber fell below $800 per thousand board feet and prices are down 30% to date this year. The latest decrease in lumber prices comes when mortgage rates have risen to their highest levels since 2009 and the costs of buying a home are increasing. The quick increase in mortgage rates has been cited as lessening demand in the homebuilding market, which could be putting downward pressure on lumber prices.

  • Homeowner equity increased 3% during Q1. Nearly 45% of homes in the country were considered equity rich, up from 41.9% in the fourth quarter. But the rising values are creating barriers for first-time buyers. Homeowners continue to benefit from rising home prices. Record levels of home equity provide financial security for millions of families and minimize the chance of another housing market crash like the one we saw in 2008. Read more here.

WHAT TO WATCH

  • Elon Musk says Twitter deal is on hold. The Tesla CEO says the deal is on hold until he receives more information about how many fake accounts there are on the social media platform. In a follow-up tweet around two hours later, Musk added that he was “still committed to the acquisition.” Twitter’s stock plummeted 18% in premarket trading following the initial announcement but trimmed some losses after the second tweet.

  • The ultimate market lows have not been reached, Bank of America’s Hartnett says. Institutional investors’ cash levels rising to 5.5% amid plunging expectations for growth and profits point to a bottom. However, results from April’s fund manager survey show investors are still a distance away from throwing in the towel. Equity allocations are still positive and investors remain heavily underweight safe-haven bonds. Read more here.

  • Berkshire Hathaway added more Occidental Petroleum stake. It bought about 900,000 shares lifting its interest in the energy company to 15.3%. Berkshire Hathaway now holds 143.2 million shares of Occidental Petroleum worth $8.5 billion. The additional purchases may fuel speculation that Berkshire, headed by CEO Warren Buffett, will add further to its stake and reach 20%, or potentially bid for the entire company.
    Read more here.

  • EU commission favors a ban on large-scale stablecoins, document shows. The European Commission is considering hard curbs on the ability of stablecoins to become widely used in place of fiat currency. Officials appear to be siding with the views of European Union finance ministers, who have proposed tough measures aimed at stopping stablecoins from replacing the euro and require issuance to halt if transactions top 1 million per day.

  • The economy is plummeting into recession as equity markets price in, says Raoul Pal. Economic growth has evaporated, the S&P year-on-year rate of change is now fully pricing in a recession, and we're seeing that across the entire forward-looking indicators that growth is imploding. Equity markets are going into the final fear phase and will be pricing in the full recession. At that point, bond yields will stop rising. Source(14:39)

  • We are entering a golden age of commodities, says Jan van Eck. We are coming out of a 10-year bear market in commodities. ESG has twisted the commodity demand mix so investors are buying more green metals. It's under the perfect setup where supply is tightened while the economy keeps growing. We're on a multi-year secular basis because of the energy transition bullish cycle for commodities. Source(26:23)
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