In the attached paper, AMP Capital’s Head of Dynamic Asset Allocation Nader Naeimi examines the slide in commodity prices and what this means for economic growth and equity markets.
The key points are as follows:
- The recent rebound in equities has been dismissed by many as a rally driven by central bank liquidity, and the slide in commodity prices have been cited as evidence of falling demand and ineffective central bank policy.
- Analysing the structural factors driving the commodity bull market over the past decade reveals that the recent weakness does not suggest economic doom and gloom.
- In fact, rather than demonstrating weakening economic growth, the fall in commodity prices represents the movement of commodities to a ‘back seat’ role with positive economic implications.
To read the paper, click here.