Goldman Sachs is “extremely bullish” for commodities, and the super cycle is expected to extend for ten years

Fed official Bullard: May raise interest rates as early as March and then shrink the balance sheet to curb inflation:

St. Louis Federal Reserve Bank President James Bullard said that the Fed may raise interest rates as early as March, and then shrink its balance sheet as the next step to curb inflation. “The Federal Open Market Committee may start raising interest rates as early as the March meeting to better control inflation,” Bullard said in a prepared speech at the CFA Institute in St. Louis on Thursday. “Following interest rate hikes in 2022 may be advanced or delayed, depending on inflation.” Bullard is one of the Fed’s most hawkish policymakers in recent times. He supported the fight against inflation at the meeting last month. According to the minutes of the December 14–15 policy meeting released on Wednesday, Fed policymakers believe that a stronger economy and rising inflation may give reasons for raising interest rates “earlier or faster than expected”.

The U.S. Service Industry Index recorded the largest drop in more than a year and a half in December, and price pressure continued to increase:

A measure of the condition of US service providers suddenly dropped from a record high in December, reflecting a slowdown in business activity and order growth. Data released on Thursday showed that the Service Industry Activity Index of the Institute of Supply Management (ISM) fell to 62 from 69.1 a month ago, which was lower than the expectations of all economists surveyed by Bloomberg, whose median expectation was 67. An index above 50 indicates an expansion of manufacturing activity.

The number of people applying for unemployment benefits for the first time in the U.S. rose to 207,000 last week:

The number of applications for unemployment benefits in the United States increased last week, but it is still close to a historical low. The labor market has withstood the impact of the latest wave of new crown epidemics. Data released by the US Department of Labor on Thursday showed that as of the week ending January 1, the number of people applying for unemployment benefits for the first time totaled 207,000, an increase of 7,000 from the previous week. The median economist estimated by Bloomberg survey was 195,000. As of the week of December 25, the number of continuous applications for unemployment benefits rose to 1.75 million. Although the number of first-time jobless claims has risen, it has remained near a 50-year low in recent weeks because companies are struggling to maintain existing employees amid widespread labor shortages and employee resignations. However, the widespread spread of omicron mutant strains once again caused economic worries.

Goldman Sachs is “extremely bullish” for commodities, and the super cycle is expected to extend for ten years:

Jeff Currie, Global Head of Commodity Research at Goldman Sachs, pointed out that the company is “extremely bullish” in commodities, and there may be a 10-year super cycle. In an interview with Bloomberg Television, Currie said that at the beginning of the new year, there were record market imbalances and mismatches in the energy, metals, and agriculture sectors, and there were a lot of funds in the system. In addition, he added that investment positions in commodities are very low.

Goldman Sachs strategists believe that Chinese stocks have entered the “hope” stage after the crash:

Goldman Sachs strategists expect that Chinese stocks will perform well after a sharp correction last year. They recommend buying Internet companies that have been hit hard by the unprecedented regulatory overhaul. “The Chinese stock cycle may transition from the ‘despair’ stage to the ‘hope’ stage,” a strategist led by Kinger Lau wrote in the report. Lau emphasized that the MSCI China Index tends to perform well after a “significant” pullback. It is pointed out that the MSCI China Index has almost never shown negative returns for two consecutive years since 2002, with the exception of 2016. The return rate of -1.6% was recorded after a 10% correction in 2015. It is expected that the regulatory aspects will be clearer and improved, which is good for the Internet industry. Omen. Lau said that in terms of monetary policy, China is “probably the only major economy in the world that will gradually relax in 2022”, which is another good thing for the stock market.



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