Market Factors: $60 oil and six other ‘high conviction’ commodity trade ideas

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Plus, the best infographic of the year and the juicy dividend yields of telecom stocks

Citi’s commodity strategist helpfully provided a series of trade ideas which I’ll review today and I’ll attempt to describe the best infographic I’ve seen in a research report this year. Later, I’ll discuss how a group of developers have built a forecasting AI program that might replace all market strategists.Citi global head of commodities research Max Layton published seven “high conviction” trade ideas with his most recent marketing presentation.

Mr. Layton also likes gold. He expects physical demand for gold investment to rise nine percentage points to 83 per cent of total world production in 2024 - and rise another two percentage points next year. Physical demand from public and private sources is at the core of his price model. Federal Reserve rate cuts, which will reduce inflation-adjusted yields available in fixed income, should drive ETF-related gold demand, and push the commodity price to US$3,000 per ounce.

The strategist is also bullish global raw sugar prices as India’s government announced curbs on exports. This trade idea, however, is not an easy one to isolate for most investors. Schneider, Vertiv and Eaton sell power distribution units, switchgear and uninterrupted power supply components. When prompted with “Will Trump win the presidential election?” the program searches for news and opinion articles and compiles a series of prioritized facts. The facts are sorted in two buckets, one supporting a negative answer and the other the positive.

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