Investment portfolios nudged by a myriad of factors
Movements in the macroeconomy have undeniable consequences for agriculture and depending on the movement indirectly impacts farmers bottom lines. The items highlighted above are designed to provide you with a general picture of what’s happening at the macro level so that you can make better business decisions.
Exchange-Traded Funds are hot with investors to make and hedge bets on stocks, bonds and commodities. ETFs drew in $243 billion in new money in 2012, compared with $161 billion in 2011, reports ETFGI. This exhibits the rising demand for ETFs among investors looking for low-cost and liquid investments.
The Federal Reserve’s news to taper quantitative easing captured traders’ focus. Since this news, gold dropped 12% in June. However, all that was lost was regained the second week of July when gold futures gained 5.4% on the Comex in New York, the most since October 2011. Traders are bullish.
The second-half of 2013 is expected to be quiet, but analysts say the stock market’s double-digit gains are here to stay. Nearly 30 investment strategists and money managers believe the S&P 500 should end the year with a 14% gain. For the short-term, markets don’t have to worry about the Fed tapering.
The U.S. dollar started to backpedal in July as Bernanke implied that easy money policies are going to remain, likely until after he leaves office in January, says Kevin Van Trump, Farm Direction. The U.S. Dollar Index is on a trend model buy signal, says Carl Swenlin, Decision Point president.
Long term, 15- to 20-year fixed rates might move 50-100 basis points higher from now through 2014, predicts Kreg Denton, First Community Bank of Western Kentucky senior vice president.
Problems in the EU are back in the headlines, and Brazil, Russia, India and China continue to struggle. "My contention is ‘if’ the global markets somehow turn things back around and stop the continued bleeding, the commodity bull market will resume," Van Trump says. "If not, then you have to assume we will continue to see more air come out of the commodity bubble."
- Summer 2013