During the commodity bull market of the 2000-2011 period, energy led and eventually passed the baton to the monetary metals in the second half of 2007-2011. During this current commodity boom which began in 2016, metals have led while energy has lagged, the inverse.
Metals have been king from 2016-2021 while energy has lagged. Their bull market will not end until 2026.
Look for metals to consolidate and energy to take the lead.
As the economic recovery slowly continues into 2021, real traction will not be seen until the second half of the year. The stock market is forward looking and a flood of liquidity should continue from the Fed and US Treasury into the first half of 2021. As vaccinations reach most of the population by mid-year, the liquidity injections will be stopped as the economy begins to stand on its own again. The stock market will react with a poor second half in 2021. Money and capital always need a home. Look for money flow to pour into the energy sector as a recovering global economy starts to consume more of it. New oil and gas wells and exploration have been virtually non-existent since Covid began. As demand increases and supply remains capped, price in the energy space will rocket. Commodities like crude and natural gas will do well, but the real returns will be in the oil service sector. In closing, a Wall Street recovery will peak mid year while a Main Street recovery gains steam starting mid 2021 into year end.
Metals will produce nice gains in the first half of the year and then stall. Energy should trend throughout the entire year. This trade has just begun and will not likely stop until 2024.
IMPORTANT FINANCIAL DISCLOSURES
THE FORECAST DOES NOT PROVIDE OR OFFER ANY INDIVIDUALIZED, CUSTOMIZED OR PERSONAL INVESTMENT ADVICE TO ANY INDIVIDUALS OR ENTITIES. AT ALL TIMES, YOU BEAR FULL RESPONSIBILITY FOR YOUR FINANCIAL, INVESTMENT AND TRADING DECISIONS. YOU SHOULD SEEK THE ADVICE OF A QUALIFIED INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION.
Important Disclaimers Regarding Our Services and the Information we Provide:
The Forecast offers information, research, educational content, articles, alerts, bulletins, newsletter items and other conveyances of information that constitute the Services. The Forecast is a publication that is available to the general public via subscriptions. The Forecast provides market commentary, market analysis, and insights, as well as general investment education, and identifies particular trades that it believes will result in gains in value, but it does not provide investment advice, whether customized or otherwise. The Forecast does not owe a fiduciary duty to you, and is not aware of your financial situation, risk appetite or other investment preferences or parameters. The only information about you that The Forecast is aware of is your name, email address, date of birth and other basic information needed to purchase a subscription.
The Forecast is a publisher, and as such relies upon the publisher’s exclusion from the definition of investment adviser as provided under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. By using our Services, you acknowledge and agree to the foregoing and that any actions or forbearance from taking action based on the information we provide and the use of our Services is entirely at your own risk, for which The Forecast and its Affiliates shall have no liability. You understand and acknowledge that trading in securities, by its nature, involves risk of significant loss.
The Forecast is not registered as a broker-dealer, investment company or investment advisor with the United States Securities and Exchange Commission or with any state securities authority. We offer access to our Site on a subscription basis only, as described further below.
- You understand that no Content published on this Site constitutes a recommendation that any particular investment, security, sector, portfolio of securities, tax strategy, transaction or investment strategy is suitable for any specific person.
- You further understand that no one in the employ of The Forecast is advising you personally concerning the nature, potential, value or suitability of any particular investment, security, portfolio of securities, transaction, investment strategy, tax advice or strategy, retirement advice or strategy, or other matter. To the extent any of the Content published on the Site may be deemed to be investment advice, such published information is impersonal, general in nature, and not tailored to the investment needs of any specific person or entity.
- You understand that the views and opinions expressed on the Site are the opinions of our contracted analysts and of our users. The analysts may differ from time to time in their opinions about the same securities.
- You understand that the owners, officers, directors, contracted analysts and employees of The Forecast have or may have personal positions in the instruments (or similar instruments) mentioned on the Site. They agree contractually not to trade in securities in any way that is inconsistent or advantageous from a timing perspective with regard to their posts on The Forecast, nor to receive compensation from or insider information on companies whose equity or fixed income securities, or company prospects or information, that they discuss on the Site.
- You understand that the risk of loss in trading securities (including, without limitation, stocks, ETFs, options and index futures) can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. You bear responsibility for your own investment research and decisions and as noted above, should seek the advice of a qualified securities professional before making any investment.
- You understand that markets are fluid, dynamic, nonlinear systems. In order to trade such systems with a good prospect of success, one should endeavor to develop the knowledge and experience necessary to navigate its complexities. Therefore, we strongly suggest that any individual who seeks to trade in these markets takes the time to learn about finance, trading, market behavior, and related topics. We sometimes provide trade set-ups and alerts on the Site. These are provided for educational and hypothetical purposes only and are not trade recommendations. The prices quoted in the alerts are based on real-time market prices as of the time stated in the alert, and not actual fills by the analyst. Prices can change in real time, and actual trading could affect trading prices. We also sometimes track the performance of these set-ups and alerts. Performance table returns don’t include commission and other execution and trading costs, including taxes, that would be incurred if these were actual portfolios. Past performance is no guarantee of future results.