Markets are an assembly of moving parts and, in this environment, inflation is a major component. If you can get the inflation versus deflation trade right, it will go a long way toward understanding how all markets could move. The commodity and consumer price inflation of the past few years started in 2020, with COVID-19
What goes up…
Barring a sudden market shock, the grain market looks like it is losing steam
Where are markets moving?
Can past patterns give insight into this year’s winners and losers?
If what goes up must come down, then does what goes down always come up? Not necessarily, but it often works that way in the markets and in specific situations in the stock market. Last year was a very weak year for global equities, so what will stock markets do in 2023? Will they bounce
When markets burst, it’s never pretty
We’ve seen plenty of price surges followed by collapses. Are commodities next?
Over the past few years, if not decades, there’s been a lot of volatility in markets and economies worldwide. You can start 30 years ago with the Asian currency crisis, Russian debt default and Long-Term Capital Management hedge fund collapse in the late 1990s as examples of explosive events in financial markets. Then, as we
Watching patterns of grain pricing
Have grain prices reached a new trading range, or will they come down?
Economics, investor sentiment and trader psychology are all popular buzzwords that try to explain human nature, but they are nothing new. They have been around as long as humans, markets and trade have been around. They are all just another way of trying to figure out what the heck is going on. The study of
Financial markets will recover, but when?
Assets are cheap now, but may get cheaper before they recover
October has notoriously been perceived as a bad month for stocks. The 1929 crash that precipitated the Great Depression, Black Monday in 1987 when the Dow Jones dropped close to 25 per cent in one day, as well as the worst month of the 2008 mortgage bubble and financial crisis all happened in October. While
The grain-fertilizer balancing act
There’s a strong correlation between grain and fertilizer prices
Every business is an economic equation balancing input costs with output prices, expenses and revenues to achieve the all-important profit margin number. For many businesses, the price of those inputs and outputs are relatively stable. In farming, where outputs are volatile agricultural commodities and inputs are made from equally volatile energy, mineral and metal commodities, managing both sides
Dealing with a murky financial future
Forget ripples; the rocks thrown into the financial pond so far have made big waves
We’re halfway through the year and a lot has happened already. From a major invasion in Europe to rising interest rates and one of the worst starts for stocks ever, this year has not been without volatility. We’ll take this mid-summer opportunity to do a 2022 halftime financial review of where we’ve been, what it
No market is an island
‘Interconnected dominoes’ mean factors react with and off each other
Nothing operates on its own — especially when it comes to the markets. Markets are just a series of interconnected economic, political and social dominoes that act and react with one another as they drift through time and space together. What happens in one area can have a large or small effect on another area
The perils of the crystal ball
The quagmire of uncontrolled variables puts any prediction, even expert ones, on shaky ground
There’s a quote from professional baseball player Yogi Berra: “It’s tough to make predictions, especially about the future.” It’s hard to say it better, but Dan Gardner’s book, Future babble: Why expert predictions fail — and why we believe them anyway, may just do that and a lot more. At the essence of it, the
How widespread will interest rate fallout be?
Looking at economic history, the effects aren’t always dramatic
Take a moment to imagine what the world and your business would look like if interest rates were at four per cent — or even six per cent — instead of two per cent. Everyone has been talking about inflation and interest rates and yield curve inversions lately, so what does it all mean? While
Cyber-Savvy Farmer
