The interest by investors in raw materials is increasingly growing: the traders are crowding in the stock exchanges negotiated on the stock exchange ranging between oil, metals and cereals. In the meantime, the speculations that the global economy manages to avoid a severe recession are intensifying, despite the fact that prospects of rates of interest increasing are shown on the horizon.
In particular, the value of the index Bloomberg Commodity Spot, which constitutes an indicator of the trend of raw materials worldwide, scored a remarkable last month 5.8% surgerepresenting the most significant increase since March 2022.
Investments in raw materials
During July, they were over 350 million dollars invested In 20 ETFs that replicate the indexes of wide spectrum raw materials, representing the second month of influx of capital in these investment vehicles this year. This figure emerges from the information collected by Bloomberg. This trend follows a four -month period in which funds were registered by the same investment tools.
“Last year we witnessed a massive exodus from products related to raw materials due to concerns for a possible recession and the decrease in inflationary expectations,” said Ryan Fitzmaurice of Marex Group Plc. “However, asset managers are now returning to ETFs based on the raw materials indexes.”
The increases in the Bloomberg Commodity Spot index were mainly towed by the oil sector and its derivatives, which have experienced growth thanks to the cuts in the production made by the main manufacturers of the OPEC+ and the most rosy macroeconomic prospects. Also other raw materials, such as copper, gold, cotton and corn, have recorded significant increases.
Problems in China and risks
In reality, the uncertain economic prospects of China carry winds against it, and this is reflected in the attitude of investors who are currently withdrawing money from some of their ETF positions. A tangible example is represented by the funds related to the oil sector: recently, they have recorded the week with the greatest outflow of capital of recent years, after oil prices have risen over 80 dollars a barrel.
However, in a wider perspective, a report dated July 31 of the JPMorgan Chase & Co. reveals that the estimated value of the Open Interest in the global markets of raw materials is growing until the end of July, touching the maximum of 1.31 trillions of dollars, the highest value of the last 13 months. Of this figure, 566 billion dollars are intended for energy markets.
Analysts, including Tracey Allen and Natasha Kaneva, stressed that “our economists note that the positive surprises related to growth and inflation They are fueling expectations of a less abrupt trend of the economy, and we continue to consider raw materials as a class of assets that does not yet receive the attention it deserves. “
What leads to an increase in the demand for raw materials
Despite the unexpected downgrading of the United States rating by Fitch that took place on August 2, an event that took the markets by surprise and thrown shadows on the main world economy, the sentiment general seems to be more positive. The current perspective is characterized byremoval of the threat of a recession, Initial interest rates who are approaching their peak and efforts of China to stimulate economic growth. These factors contribute to promoting an increase in the global demand of goods, and consequently, of raw materials.
In this scenario, with the raw materials ready to exploit the impulse of a growing question in a limited offer context, the traders are returning to invest capital in these assets. The expectation of a market in which raw materials will guide an increase in growing consumption is one of the drivers that are pushing investors to channel money again to this sector.
