Oil has bottomed now and we are looking at oil prices recovering. That will probably bring a final rally in stocks that should last into March.
Large infrastructure expenditures that usually follow recession or hard landing will hopefully lead us into a commodity boom, this can be seen in copper and iron prices firming up as well as crude bottoming on price action and fundamentals most of which are due to underinvestment in commodities sector. New oil discovery drilling or mine development for commodities that was very commonly seen on London, Toronto and Australian mining sector has virtually been zero since Covid and that will show up shortly as shortages.
Prices of stocks such as xom have bottomed and industry leaders like Warren Buffet who is generally early on trends buying and adding into his holding of OXY
On Indian stocks companies like Hindustan copper have already doubled. Steel companies, hindalco, national aluminium, nmdc etc are well bid as everyone is expecting a rotation of funds into commodity stocks as tech and other companies would see an outflow due to impending hard landing and a froth. They were the go to assets when things got tough during the GFC in 2008. Because when a crises like hard landing and unemployment will hit, most of the government focus will be spending on infrastructure.
Indian infrastructure companies are having a good run with a good order book and that will only lead to higher shortages in commodities.
Powell has been promising soft landing and I know most Indians believe the Indian market and economy is isolated from the shocks of international markets but really can we source cheaper iron, copper and cement prices if international companies find it hard. Can we export more fabrics or implement more IT projects if the demand slows internationally. I don’t really understand the logic that our economy and stocks are isolated
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