Secular capital rotation into deflated commodities
The guest argued that a major secular asset rotation is underway, shifting capital out of overvalued stocks and bonds into historically deflated commodities.
The argument
Oliver noted that the Bloomberg Commodity Index turned up on annual momentum in October, driven by base metals and grains even before oil broke out. He believes the eventual breakdown of the stock market will accelerate this capital flight into tangible assets.
The thesis, stress-tested
✓ What validates it
- ✓Bloomberg Commodity Index sustaining levels above its 2022 highs
- ✓Continued upward momentum in base metals and grains
▸ Risks discussed
- ▸Late buyers getting 'gut kicked' by chasing short-term spikes driven by transient headlines
- ▸Short-term volatility in commodity prices
Hear it yourself
"You gotta have that one more rally, and we had it. Thank you. The new highs we just saw, I think, are transient. I think it we we we thought it would occur, and we thought that probably it would extend into this month. And I suspect you may even make higher highs this month than you did last. But what I'd be very careful for careful of this time is that if you start to stall this rally, and you won't see it on this chart, but, you know, at the day to day action, you start to wobble off in during the middle of the quarter and then soften by the end of the quarter."
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