L'intérêt à découvert pour Invesco DB Agriculture Fund donne aux investisseurs une idée du degré auquel les investisseurs parient sur la baisse de l'action de Invesco DB Agriculture Fund. Les données sur l'intérêt à découvert sont mises à jour toutes les deux semaines.

Invesco DB Agriculture Fund (ARCA:DBA), Rapport sur les intérêts à découvert

Basic Materials

The index, which is comprised of one or more underlying commodities (index commodities), is intended to reflect the agricultural sector. The fund pursues its investment objective by investing in a portfolio of exchange-traded futures.

Invesco Government & Agency Portfolio, Institutional Class

Invesco Treasury Collateral ETF

Invesco Short Term Treasury Etf -

Invesco Government & Agency Portfolio

Invesco Short Term Treasury ETF

Invesco DB Agriculture Fund

Xtrackers MSCI All World ex US Hedged Equity ETF

DBA Sempra 5.750% Junior Subordinated Notes due 2079

The Hang Seng Index briefly crossed into bear market territory at one point on Wednesday, losing over 20% from its recent high following the U.S.&#8217;s escalation of tariffs on Chinese imports. 
Although the index pared some of the losses on Thursday with 2.1% gains after President Donald Trump decided on a 90-day pause, the shockwaves are being felt across a variety of <a href="https://www.benzinga.com/etfs">U.S.-listed ETFs</a>, focusing investor attention on trade-sensitive assets.
Also Read: <a href="https://www.benzinga.com/25/04/44730527/bill-ackman-feels-the-sting-pershing-square-portfolio-down-14-ytd-amid-tariff-volatility">Bill Ackman Feels The Sting: Pershing Square Portfolio Down 14% Year-To-Date Amid Tariff Volatility</a>
<h1 class="wp-block-heading">ETFs Under Pressure</h1>
Direct exposure to Hong Kong has taken a tangible dent. The iShares MSCI Hong Kong ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EWH#NYSE">EWH</a>), which tends to follow closely the performance of the Hang Seng, has tracked the index&#8217;s sharp depreciation over recent weeks. The fund has declined 12.26% in the past month. The ETF&#8217;s decline is reflective of investor disappointment in the region&#8217;s prospects for growth, as well as general concern regarding the build-up of geopolitical tensions.
But the effect extends well beyond Hong Kong-centric funds. A number of ETF categories with indirect exposure to China or global trade patterns are exhibiting signs of strain:
Emerging Market ETFs (Ex-China) such as the iShares Core MSCI Emerging Markets ex China ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/EMXC#NASDAQ">EMXC</a>) have experienced renewed popularity as investors attempt to avoid direct Chinese equity risk. Yet these funds are still exposed to general macroeconomic weakness due to the trade war. The shares in the fund have collectively declined about 3.4% over the past month.
Global Equity ETFs like the Vanguard Total World Stock ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VT#NYSE">VT</a>) and iShares MSCI ACWI ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ACWI#NASDAQ">ACWI</a>) are not isolated either. They both have positions in Chinese and Hong Kong equities, and although their diversification helps take the sting, the Asian equities pullback is starting to take its toll on overall return.
Also Read: <a href="https://www.benzinga.com/25/04/44721421/exclusive-from-corn-to-crypto-teucrium-ceo-talks-strategy-risk-and-the-launch-of-xxrp">Exclusive: From Corn To Crypto &#8211; Teucrium CEO Talks Strategy, Risk And Launch Of XXRP</a>
U.S. Sector ETFs are also responding to the escalating tension.
Technology ETFs such as SPDR Select Sector Fund &#8211; Technology (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NASDAQ">XLK</a>) are at risk from China&#8217;s revenue and supply chain disruptions. In the past four weeks, the fund has declined more than 6%.
Industrial ETFs such as the SPDR Select Sector Fund &#8211; Industrial (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLI#NYSE">XLI</a>) might be hit if Chinese tariffs bear on U.S. exports of manufacturing or essential imported parts.
Agricultural ETFs like the Invesco DB Agriculture Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBA#NYSE">DBA</a>) might be hurt if China retaliates by restricting purchases of U.S. agricultural products.
<h1 class="wp-block-heading">Market Fallout </h1>
The Hang Seng&#8217;s brief plunge into bear market range — its most steep drop in more than a year — has increased worries about global economic stability. Washington&#8217;s <a href="https://www.benzinga.com/topic/tariffs">plan to add tariffs</a> on a wide range of Chinese merchandise ignited the decline in the index, which invited a retaliatory response from China — an 84% tariff on U.S. goods.
Although the initial impact has been on Chinese and Hong Kong markets, the wider implications are difficult to avoid. Investors can now expect greater market volatility as news surrounding trade talks continues to influence sentiment.
Possible further <a href="https://www.oecd.org/en/about/news/press-releases/2025/03/global-economic-outlook-uncertain-as-growth-slows-inflationary-pressures-persist-and-trade-policies-cloud-outlook.html">slowing </a>of global growth, particularly if extended trade barriers limit cross-border investment and disrupt supply chains, are also on the cards.
Inflationary pressures within the U.S., with tariffs elevating the price of imported merchandise, can also potentially make the policy course of the Federal Reserve more challenging.
As trade tensions intensify, the performance of region-specific and sectoral ETFs provides a window into how markets are pricing in risk. With the Hang Seng&#8217;s fall serving as a canary in the coal mine, investors might need to rethink their allocations and brace for extended turbulence in the coming months.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/government/regulations/25/04/44730455/bearish-sentiment-hits-7-week-high-mimicking-35-year-old-record-which-marked-the-bottom-of-the-october-1990-bear-market">Bearish Sentiment Hits 7-Week High, Mimicking 35-Year Old Record Which Marked The Bottom Of The October 1990 Bear Market</a></li>
</ul>
Photo: Shutterstock

Asia

Global

ETFs

ACWI

EMXC

Hang Seng Skids Into Bear Zone As US-China Tariff War Rattles Global ETFs

As <a href="https://www.benzinga.com//node/39583371">cities in the U.S. continue to break their historical heat records</a>, workers, lawmakers and businesses across the country are launching a debate: should the state grant protections for workers in extreme heat conditions?
Most of the country has been under heat alerts since rising temperatures began breaking comfortable levels in early July.
On Tuesday, meteorologists began warning people living in Midwestern and East Coast states. An upcoming heat wave is expected to break records in many cities, putting 140 million Americans under heat alert.
Earlier this month, at least 50 cities saw their historical heat records broken by a heat wave that affected most of the Southwest. Palm Springs, California and Las Vegas reached 124 and 120 degrees Fahrenheit, respectively, <a href="https://www.usatoday.com/story/news/weather/2024/07/11/temperature-records-heat-wave-west/74372547007/">USA Today </a>reported.
Many cities and localities in the East Coast are expected to surpass their historical average highs on this week.
The trend is global, with the last 13 months marking the highest temperatures on record for that month, according to official EU data from the Copernicus Programme.
The upcoming heat wave in the U.S. is expected to be dangerously lethal. At least 28 people have died this summer due to extreme heat events, according to a <a href="https://www.washingtonpost.com/climate-environment/2024/07/10/heat-wave-us-death-toll/">report</a> by the Washington Post.
<h3 class="wp-block-heading">Should Workers Have Federal, State Protections For Heat Risk?</h3>
Rising temperatures across the globe are forcing people to change their living habits, including how many hours of the day they can spend outside without air conditioning.
This has serious consequences for work, especially in sectors that require workers to be exposed to high temperatures under the sun for an extended period of time.
These encompass delivery and postal workers, the construction and agriculture sectors as well as those working in infrastructure repairs and gardening in urban environments, among others.
Read Also: <a href="https://www.benzinga.com//node/39799850">5 Things You Might Not Know About J.D. Vance: &#8216;Hillbilly Elegy&#8217; Author, Bitcoin Holder, First Millennial VP Pick And More</a>
Health risks for workers include "heat exhaustion and heat stroke, occupational injuries from high heat exposure such as burns or falls from dizziness, and exacerbation of preexisting conditions such as asthma, kidney disease, or heart disease," according to reports by the Center for Disease Control and the Occupational Safety and Health Administration (OSHA).
Earlier this month, the Biden administration proposed a new rule that, for the first time, could introduce protections for workers exposed to health risks due to rising heat levels, whether outdoors or indoors.
The proposal comes from OSHA, and outlines actions that employers should take to protect their employees from heat risks. If finalized, the rule could add protections for 35 million employees nationwide.
"The purpose of this rule is simple. It is to significantly reduce the number of work-related deaths, injuries and illnesses suffered by workers who are exposed to excessive heat and exposed to these risks while simply doing their jobs," an administration official told reporters on a press call, <a href="https://www.washingtonpost.com/climate-environment/2024/07/02/osha-workers-extreme-heat-protections/">according</a> to the Post.
The rule would introduce actions that employers must fulfill if the weather passes two specific temperature marks. Above 80 degrees Fahrenheit, employers must offer drinking water and break areas, as well as plan out the work schedule in an incremental rhythm for the bodies of workers to adapt to the heat.
At 90 degrees, employees must be monitored for signs of heat illness and take mandatory 15-minute breaks every two hours.
No federal heat protection law is in place, and only five states exercise worker safety precautions: California, Colorado, Minnesota, Oregon and Washington.
The timeline for OSHA's proposal would make it final by 2026. Its rollout will largely <a href="https://www.benzinga.com/general/politics/24/07/39780356/trumps-2024-election-betting-odds-hit-record-high-after-assassination-attempt-payouts-for-ex-pre">depend on who wins the U.S. presidency in November</a>. A victory for Donald Trump would likely threaten its existence.
High-profile Republicans have voiced opposition to worker protections for heat risk. Republicans have traditionally stood against policies related to climate change that are liable to impact businesses or industries.
In Florida, where some of the highest temperatures in the country have registered in recent years, Gov. Ron DeSantis, a Republican, recently signed a piece of legislation barring local governments from raising protections for workers exposed to heat.
Texas had passed a similar bill the previous year, which was dubbed the "Death Star law." The bill was ruled unconstitutional by a judge, after Houston, El Paso and San Antonio presented lawsuits against it.
<h3 class="wp-block-heading">Industry Impacts</h3>
Progressive voices like the Center for American Progress have written that exposing workers to heat risk can have bad consequences for the economy, including "lost worker productivity, increased health care costs and worker compensation claims, and threats to workers' financial stability from missing work."
For conservatives, adding protections for workers can reduce productivity for businesses and lead to a loss in competitiveness.
Business groups lobbying against the OSHA rule argue that trigger temperatures proposed by the rule should not be set as a blanket policy nationwide, as workers from different parts of the country have different tolerance thresholds for heat.
For workers in Florida, "an 80-degree threshold for them isn't going to be considered hot," said Prianka Sharma, vice president and counsel for regulatory affairs for The American Road &amp; Transportation Builders Association.
Multiple ETFs follow industries that can be affected by changes in policy around heat risk.
iShares US Home Construction ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/ITB#BATS">ITB</a>) is the largest ETF by total assets following the construction industry. It's followed by SPDR S&amp;P Homebuilders ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XHB#NYSE">XHB</a>) and the Invesco Building &amp; Construction ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PKB#NYSE">PKB</a>).
Agriculture is another major sector that affected by the heat issue. The Invesco DB Agriculture Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBA#NYSE">DBA</a>) leads the list by total assets, with Teucrium Wheat Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WEAT#NYSE">WEAT</a>) and First Trust Alternative Absolute Return Strat ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FAAR#NASDAQ">FAAR</a>) next.
Now Read:&nbsp;
<ul>
<li><a href="https://www.benzinga.com//node/39794934">3 Under-the-Radar Clean Energy Stocks With Upside Potential, Regardless Of Who&#8217;s In The White House</a></li>
</ul>
Shutterstock image.

News

Sector ETFs

Politics

Markets

General

First Trust Alternative Absolute Return Strategy ETF

FAAR

iShares Dow Jones US Homenstruction Index Fund

PowerShares ETF Trust Dynamic Building &nstruction Portfolio

WEAT

Scorching Heat Breaks Records, But 2024 Election Outcome May Hold Worker Protections Hostage

Avian influenza, also known as bird flu, has public health <a href="https://www.benzinga.com/news/24/07/39594907/amid-rapidly-rising-bird-flu-cases-moderna-lands-176m-worth-us-government-contract-for-vaccine">officials on alert</a> after it spread to an unprecedented number of cows in the U.S. this year and led to positive tests of the virus in four U.S. dairy workers so far this year.
A severe variant of the H5N1 strain infected animals ranging from alpacas to house cats worldwide since 2020 and caused lethal outbreaks in commercial poultry, but this is the first year it has infected cows, Reuters reported.
Humans have contracted different bird flu strains in Australia and Mexico, while different H5 subtypes have also shown up in other parts of the world including China and Cambodia.
Most of the human cases have come from exposure to poultry, live poultry markets and dairy cattle, but scientists worry the virus could mutate so it could easily spread between humans and spark a pandemic. The World Health Organization says the risk to people is low at this point, Reuters reported.
The first known bird flu cases happened in Texas in March, and now the virus has infected dairy herds in 12 states. The U.S. Agriculture Department said tests so far reveal that the virus detected in cows is the same H5N1 virus affecting wild birds and commercial poultry flocks.
Also Read: <a href="https://www.benzinga.com/general/biotech/24/06/39213667/first-human-death-from-bird-flu-strain-puts-vaccine-stocks-back-on-the-map">First Human Death From Bird Flu Strain Puts Vaccine Stocks Back On The Map</a>
The four dairy workers who have tested positive for the virus this year had mild symptoms such as conjunctivitis, or pink eye.
Michigan, which has two of the four cases infecting dairy workers, has led the nation in efforts to stop the spread of bird flu and prevent negative impacts to the state&#8217;s dairy industry. 
State restrictions include tracking who comes and goes from farms as Michigan tests more people than any of the 12 states with confirmed cases in cows, according to a Reuters survey of state health departments. 
So far this year, various forms of bird flu have been detected in 21 people worldwide, according to Reuters.
Price Action: Most companies busy developing bird-flu vaccines saw gains on Wednesday. Moderna, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MRNA#NASDAQ">MRNA</a>) picked up 1.18% to close at $117.44, while GSK plc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GSK#NYSE">GSK</a>) slipped 0.12% to $38.56 and Carlisle Companies Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CSL#NYSE">CSL</a>) gained 2.28% to $416.88.
Dairy stocks and agriculture and dairy cattle exchange-traded funds gave mixed reactions. AGCO Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AGCO#NYSE">AGCO</a>) gained 0.69% to close at $94.21 on Wednesday as Aemetis, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMTX#NASDAQ">AMTX</a>) declined 3.18% to $3.35 and Balchem Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/BCPC#NASDAQ">BCPC</a>) picked up 0.60% to $162.89.
Invesco DB Agriculture Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBA#NYSE">DBA</a>) declined 1.23% on Wednesday to $1.23, while First Trust Dow Jones Select MicroCap Index Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FDM#NYSE">FDM</a>) rose 1.71% to $59.51 and Invesco S&amp;P SmallCap 600 Pure Value ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RZV#NYSE">RZV</a>) improved 1.32% to $98.
<h4 class="wp-block-heading">Read Now:</h4>
<ul>
<li><a href="https://www.benzinga.com/general/biotech/24/07/39710325/investor-that-backed-moderna-raises-3-6b-for-ai-driven-biotech-ventures">Investor That Backed Moderna Raises $3.6B For AI-driven Biotech Ventures</a></li>
</ul>
Photo: Shutterstock

Health Care

AGCO

AMTX

BCPC

First Trust/First Trust Dow Jones Select MicroCap Index Fund

MRNA

Rydex ETF Trust S&P Smallcap 600 Pure Value ETF

Health Officials Keep Close Eye On Bird Flu As It Infects Cows For The First Time

The impact of inflation on everyday items doesn&#8217;t take a vacation, and many Americans will witness rising prices during <a href="https://www.benzinga.com/top-stories/24/07/39634053/is-the-market-open-on-july-fourth-everything-you-need-to-know">their Independence Day celebrations.</a>
A basket of products for the traditional Fourth of July cookout will reach its highest level ever recorded, according to a survey run by the American Farm Bureau. 
This year, a cookout for 10 people will cost $71.22, reflecting a 5% increase from last year and a staggering 30% rise compared to five years ago. This equates to $7.12 per person, the highest per-person cost ever recorded.
Nationally, this means we are surpassing $7 per person for the first time, with the total meal coming to $7.12 a person.
Traders monitoring agricultural commodities have noted that the Invesco DB Agriculture Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBA#NYSE">DBA</a>) has surged 13% in the past year and over 50% compared to five years ago.
&#8220;Your grocery bill may be a shock, but it is in line with the inflation that has roiled the economy – including the farm economy – over the last several years,&#8221; said Bernt Nelson, an economist at the American Farm Bureau.
<h3 class="wp-block-heading">Meat Costs: The Hefty Burden</h3>
Meat prices, which constitute the largest portion of the cookout budget, have seen significant hikes:
<ul>
<li>Ground Beef: 2 pounds cost $12.77, up 11% from last year. Nelson highlighted that the smallest cattle inventory in 73 years, combined with high summer demand and improved drought conditions, is driving up beef prices.</li>
<li>Pork Chops: $15.49 for 2 pounds, an 8% increase. The impact of California&#8217;s Proposition 12, which mandates higher animal welfare standards, is pushing pork prices higher nationwide.</li>
<li>Chicken Breast: $7.83 for 2 pounds, a 4% decrease. Increased broiler production has helped lower chicken prices, offering some relief.</li>
</ul>
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Item</th>
<th>Cost (2 pounds)</th>
<th>Change from Last Year</th>
</tr>
</thead>
<tbody>
<tr>
<td>Ground Beef</td>
<td>$12.77</td>
<td>+11%</td>
</tr>
<tr>
<td>Pork Chops</td>
<td>$15.49</td>
<td>+8%</td>
</tr>
<tr>
<td>Chicken Breast</td>
<td>$7.83</td>
<td>-4%</td>
</tr>
</tbody>
</table>
</figure>
<h3 class="wp-block-heading">Beef Prices Outpace Inflation</h3>
The latest Bureau of Labor Statistics&#8217; consumer price inflation (CPI) report for May shows ground beef at $5.15 per pound. 
This national price average marks a significant increase from $4.10 per pound three years ago and $3.82 per pound five years ago, prior to the pandemic. 
Consequently, beef prices have surged by 26% over the past three years and 35% over the past five years, outpacing the average CPI inflation during the same periods.
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="500" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/04082158/image-6-1024x500.png" alt="" class="wp-image-420104" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/04082158/image-6-1024x500.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/04082158/image-6-300x147.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/04082158/image-6-768x375.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/04082158/image-6-1536x750.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/07/04082158/image-6.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h3 class="wp-block-heading">Rising Cost Of Side Dishes</h3>
Side dishes have also seen price changes:
<ul>
<li>Hamburger Buns: $2.41 per package, up 7%.</li>
<li>Ice Cream: $5.65 per half-gallon, up 7%.</li>
<li>Lemonade: $4.19, up 12%, driven by reduced lemon production and higher sugar prices.</li>
</ul>
Other items like potato chips ($4.90) and strawberries ($4.61 for two pints) have also become more expensive.
At least one side dish item, potato salad, decreased by 4%. This is due to higher egg prices offset by lower potato prices.
<h3 class="wp-block-heading">Regional Price Variations</h3>
Prices vary by region, with the Northeast enjoying the lowest costs and the West experiencing the highest. Here's a breakdown:
<ul>
<li>Northeast: $63.54 for 10 people</li>
<li>South: $68.33 for 10 people</li>
<li>Midwest: $68.26 for 10 people</li>
<li>West: $80.88 for 10 people</li>
</ul>
Despite rising costs, Americans still benefit from the world&#8217;s most affordable food system, according to Nelson. On average, Americans spend just 6.7% of their total expenditures on food and non-alcoholic beverages, the lowest percentage globally.
However, &#8220;consumers nationwide still view inflation and high food prices as&nbsp;ongoing problems,&#8221; the economist stated, as inflation erodes purchasing power, posing challenges for both consumers and producers. 
Now Read: 
<ul>
<li><a href="https://www.benzinga.com/top-stories/24/07/39621719/americans-divided-on-feeling-richer-or-poorer-this-fourth-of-july-nearly-half-say-inflation-is-worse">Americans Divided On Feeling Richer Or Poorer This Fourth Of July, Nearly Half Say Inflation Is Worse Than Last Year</a></li>
</ul>
Image: Shutterstock

July Fourth Cookout Inflation Hits Record Highs: 'Your Grocery Bill May Be A Shock' But This Side Dish Costs Less, Expert Says

As the boomer generation heads into retirement, certain countries need immigrants of working age to keep the productive economy running, generating tax income to support those living from pensions.
That&#8217;s especially the case in Europe. 
According to Eurostat, the European Union's official statistics body, the continent will face a 6% drop in population by the year 2100 with a fertility rate of 1.53 live births per woman. 
It takes a fertility rate of 2.1 to keep a population level steady.
Housing Is Not Enough: Housing shortages in most major developed economies are limiting those countries from counteracting demographic-led crises, <a href="https://www.bloomberg.com/news/features/2024-05-05/global-housing-crisis-affects-immigration-fueled-growth-living-standards?srnd=homepage-americas&amp;sref=TBDibEcD">per</a> Bloomberg.
And a widespread lack of affordable housing is making it harder for these countries to receive the immigrants they need to bolster their economies.
Canada, for instance, had a yearly population growth of almost 2.4% last year, due to open immigration policies after pandemic-era restrictions were taken down. 
Australia's population grew 3.7% in the past two years.
But population increases can fuel drops in GDP per capita, as is the case in 13 of the world's most advanced nations where populations increase and economic outputs don't. These include Australia, Canada, New Zealand, the UK as well as several top economies within the EU.
Read Also: <a href="https://www.benzinga.com//node/38634919">Texas Governor Abbott&#8217;s Anti-Immigration Measures Spark Environmental Crisis Along Texas-Mexico Border: &#8216;It&#8217;s Been Destroyed,&#8217; Says A Resident</a>
Rising home prices, as well as increasing rents, are partly behind drops in living standards. In the U.S., prices of homes are expected to grow 4.2% on average during 2024, making it a good year for homeowners and a bad one for those looking to purchase their new home, as mortgage levels continue high amid high-interest rates.
Rising interest rates <a href="https://www.benzinga.com//node/35315700">put a stop to a new home construction boom last year</a>. The same situation has been replicated around the globe as interest rates were brought up to counteract widespread inflation following the Russian invasion of Ukraine.
Governments are having trouble keeping the rate of newly built houses in line with the rate of immigration. In Canada, Prime Minister Justin Trudeau's government is scaling down its immigration goals by 20% over the next three years in an effort to keep population growth realistic within the country's ability to host newcomers.
Benzinga's Take: Continuous strains in the housing sector can become a sticky hurdle against efforts to grow populations and fight demographics-led economic woes in developed nations. A loss in GDP per capita in advanced economies can mean bad news for industries relying on exports, including oil and gas, agriculture, manufacturing (including the automotive sector) and consumer electronics.
Some of the largest ETFs following these sectors are United States Oil Fund LP, (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), Vanguard Information Technology Index Fund ETF, (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VGT#NYSE">VGT</a>) and Invesco DB Agriculture Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBA#NYSE">DBA</a>).
Now Read: <a href="https://www.benzinga.com//node/38624536">Federal Reserve Dismisses Rate Hike Fears, Labor Market Cools, Apple Lures Investors With Record-Breaking Buyback: This Week In The Market</a>
Photo by Vladislav Klapin on Unsplash.

Real Estate

Developed Countries Need Immigrants, But Housing Just Isn't Enough: Report

Source: <a href="https://www.streetwisereports.com/article/2024/04/19/is-a-commodities-super-cycle-on-the-way.html?utm_medium=feed">Streetwise Reports 04/19/2024</a>
Are we at the start of a commodities supercycle? We sat down with McAlinden Research to see what they had to say about the current state of commodities.
McAlinden Research Partners is a global provider of original investment strategy insights. The company&#39;s primary goal is to pinpoint profitable investment opportunities in their early stages and promptly inform their clients about these potential avenues for growth. Its founder, Joseph J. McAlinden, has over five decades of experience in the research and investment space.
With this in mind, we at Streetwise thought it would be good to sit down with some of the McAlinden team to get their take on what is currently going on in the commodities market.
First, we discussed current trends in the commodities space.
The McAlinden team told us, &quot;In the stock market, we have a super bull market. That is not showing any signs of letting up.&quot; However, when it comes to commodities, the market is a mixed bag. They pointed out that some commodities, such as cocoa, have soared while others, like lumber, have been struggling.
<h2>AI and Y2K</h2>
In terms of a parallel, the McAlinden team said, &quot;Market cycles don&#39;t repeat, but they do rhyme&quot; and this reminded them a bit of the late 90s and early 2000s. People thought the world was going to end with Y2K, which led to high revenue in technology companies. However, once the world realized the sky wasn&#39;t falling, it led to a major correction.
The McAlinden team compared this to the current excitement surrounding AI. Eventually, the market will learn if AI has lived up to the hype.
Was it as scary as everyone predicted?
Maybe it won&#39;t be as advanced as we had previously thought, and when that happens, corrections will be made like with technology during Y2K.
<h2>A Geopolitically Influenced Market</h2>
Now, the McAlinden team explained that commodities are influenced by similar fears and movements in the world. They said, &quot;Throughout history, you see that commodities are very heavily impacted, more impacted by geopolitics than equities.&quot;
For example, OPEC&#39;s oil embargoes significantly impacted the prices of oil in the 1970s, and this alliance of oil producers continues to have a profound impact on the price of energy commodities today.
&quot;Now, within OPEC, or this OPEC+Syndicate, you have countries like Russia and Saudi Arabia, which are both countries within or right on the edge of war zones&quot; the McAlinden team explained. &quot;They depend . . . the free movement of trade that is subject to a lot of risk. And that is definitely pushing up some of the commodity prices, particularly in energy.&quot;
<blockquote class="callOut left">Still, the team made it a point to note that they don&#39;t believe we are at the beginning of a commodities super cycle yet, though &quot;we may get there in the next couple of years.&quot;</blockquote>
Though the team pointed out that there has been a lot of chatter about &quot;worst-case scenarios&quot; that is not what has happened yet.
&quot;There&#39;s been a lot of chances [where we thought] this could get really bad, this could spiral out of control, but for the most part, the state actors have been pretty rational in trying to avoid these cataclysmic events that might create something like a supercycle.&quot;
They continued, &quot;I think that that has saved the world. [Still] there&#39;s only so many times you can really go right up to the edge of that risk cliff and not end up falling into it. And that&#39;s what you always have to be looking out for in commodities.&quot;
Still, the team made it a point to note that they don&#39;t believe we are at the beginning of a commodities super cycle yet, though &quot;we may get there in the next couple of years.&quot;
Once this happens, almost all commodities could appreciate in value simultaneously, but right now, they are still mixed and dependent on a myriad of factors, including geopolitics and weather.
<h2>Closer and Closer to a Recession</h2>
We then went on to discuss the current state of inflation, as commodities are also affected by this.
The McAlinden team said, &quot;The Fed suggested they were going to cut [interest rates] three times, and traders basically ignored that, and we&#39;re talking six or seven cuts . . . the data for the year started to show sticky inflation, and strong employment at the headline level; however, this was a bit misleading . . . there are reasons to expect inflation to improve, but [we] doubt it is going to happen in the next six months.&quot;
When asked about the misleading nature of the employment readings, the McAlinden team turned to current headlines regarding increased job creation in the U.S. Though the most recent reports show that job growth is beating the highest estimates of economists, this does not take into account the impact of part-time / contract work accounting for the entire net increase in payrolls over the past several months. So, while job creation is accelerating, full-time work is not.
<blockquote class="callOut right">The Biden White House has succeeded in bringing down CO2 emissions to their target level, but that has come at the expense of higher oil prices because of a lack of investment.</blockquote>
A small part of this is the emphasis among the young workforce to enter the so-called &quot;gig economy.&quot; More and more working millennials and Gen Z are leaning toward freelance and contract work rather than full-time employment.
A larger aspect, according to McAlinden&#39;s team, is &quot;this wave of immigration that the United States is experiencing right now, which is starting to inflate the supply of labor.&quot; People are coming to the United States to gain work visas. However, many of these workers tend to end up in part-time work. &quot; The number of part-time workers is exploding, but the number of full-time workers is falling, and it&#39;s falling at a rate we haven&#39;t seen in some time.&quot;
This is leading us closer and closer to a recession.
<h2>The Impact of the 2024 Election</h2>
Commodities are often influenced by federal policies. With this in mind, we spoke about how commodities may be impacted based on the results of the 2024 election. The current candidates are incumbent Democrat Joseph Biden and Republican nominee Donald Trump.
&quot;The outcome of the election will be important&quot; the McAlinden team told Streetwise.
Oil is one commodity in particular that may be affected. &quot;Trump is essentially running on this drill, baby drill mantra&quot; they said. &quot;One of his big campaign points is that [energy companies are] going to drill more when he&#39;s president . . . despite the fact that we have seen oil kind of go up to record highs, it&#39;s only slightly higher than where we were going back to 2020. Back in 2020, production was at 13.1 million barrels, which was the record . . . Today, we&#39;re [still] only at 13.1 million barrels. We were at 13.3 a couple of months ago.&quot;
<blockquote class="callOut left">&quot;If Trump was to win [that would be] bearish for oil prices because, if production is up, we&#39;re going to see prices come down&quot; they explained.</blockquote>
This is largely because &quot;The Biden White House&#39;s Interior Department is very hostile to oil companies, and oil companies don&#39;t really feel very comfortable investing a whole lot in North America right now because of the administration. So one president is saying drill, baby drill, the other is very concerned about climate change.
The Biden White House has succeeded in bringing down CO2 emissions to their target level, but that has come at the expense of higher oil prices because of a lack of investment, a lack of . . . leasing federal land to [energy] companies, and things like that. So, there definitely will be commodity implications from the election. And we think that really is going to be pronounced in energy commodities.&quot;
All in all, the current policies in today&#39;s White House and the policies Trump&#39;s administration will put in place if he is elected may be significantly different.
&quot;If Trump was to win [that would be] bearish for oil prices because, if production is up, we&#39;re going to see prices come down&quot; they explained.
<h2>The Weakening of the US Dollar</h2>
Another factor in a possible commodities supercycle is the status of the U.S. dollar.
&quot;We&#39;ve seen the dollar remain very strong over the past couple of years. It&#39;s weakened a little bit since 2022 when the dollar index broke 20-year highs, but when the dollar depreciates versus other currencies, commodities tend to benefit from that since . . . commodities are priced in dollars.&quot;
<blockquote class="callOut right">If the Federal Reserve stays tight and keeps the dollar strong, that&#39;s probably not so good for commodities.</blockquote>
This will allow other countries to buy even more commodities as their local currencies will be able to purchase more product in dollar terms.
They continued, &quot;The path of commodities will be heavily influenced by what the United States Federal Reserve does. If the Federal Reserve stays tight and keeps the dollar strong, that&#39;s probably not so good for commodities.
However, if the Fed is as dovish as everyone else or more dovish (it doesn&#39;t look like it&#39;s gonna be the case right now), that would weaken the dollar and would probably be good for commodities, assuming that there&#39;s not some major economic downturn that&#39;s causing those rates to come down like that.&quot;
<h2>ETFs</h2>
In summation, it looks like we are not yet at the starting line of the commodities super cycle, but we may get there in the next couple of years. With this in our back pocket, we asked the McAlinden team if they had any ETFs they thought might be impacted.
&quot;Unfortunately, things have gotten harder for equity investors trying to acquire commodities exposure&quot; they said. &quot;Last year, 21 commodity ETNs were actually closed out by Barclays.&quot; These covered most commodities across the board, and some of the pure plays that just focused on one commodity, like cocoa, had been some of the highest returning ones.&quot;
Still, the team had a handful of solid commodity-focused ETFs they were looking at.
Invesco&#39;s family of funds is one of these that covered a pretty broad allocation of commodities.
Another is Invesco DB Commodity Index Tracking Fund (ARCA:DBC), though McAlindnen shared more segmented ETFs such as Invesco DB Agriculture Fund (ARCA:DBA) for ags as well.
&quot;These are the kinds of the products that we&#39;re looking at to represent the performance of some kind of ideas that we might highlight as themes at some point&quot; they said.
Continuing on with their list, they shared mining ETFs such as Global X Copper Miners ETF (ARCA:COPX) and VanEck Gold Miners ETF (ARCA:GDX).
As for energy, they pointed out Invesco DB Oil Fund (ARCA:DBO), Energy Select Sector SPDR Fund (ARCA:XLE), and Sprott Uranium Miners ETF (ARCA:URNM).
Important Disclosures:
<ol>
<li>Katherine DeGilio wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.</li>
<li>This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports&#39; terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.</li>
</ol>
McAlinden Research Partners Disclosures 
This report has been prepared solely for informational purposes and is not an offer to buy/sell/endorse or a solicitation of an offer to buy/sell/endorse Interests or any other security or instrument or to participate in any trading or investment strategy. No representation or warranty (express or implied) is made or can be given with respect to the sequence, accuracy, completeness, or timeliness of the information in this Report. Unless otherwise noted, all information is sourced from public data. 
McAlinden Research Partners is a division of Catalpa Capital Advisors, LLC (CCA), a Registered Investment Advisor. References to specific securities, asset classes and financial markets discussed herein are for illustrative purposes only and should not be interpreted as recommendations to purchase or sell such securities. CCA, MRP, employees and direct affiliates of the firm may or may not own any of the securities mentioned in the report at the time of publication.

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Is a Commodities Super Cycle on the Way?

Commodities have been performing remarkably well this year, with the Bloomberg Commodity Index, a widely viewed measure of broad commodities prices, rising to its highest level since November. Most of the rally were driven by higher prices for oil, gold, and cocoa. 
While most commodity ETFs have been soaring, United States Oil Fund (ARCA:USO), United States Brent Oil Fund (ARCA:BNO), Invesco DB Agriculture Fund (ARCA:DBA), United States Gasoline ETF (ARCA:UGA) and GraniteShares Gold Trust (ARCA:BAR) have been the show stealers so far this year. 
Global oil prices have soared to the highest level in seven months, buoyed by the Ukrainian attacks on Russian energy facilities and escalating conflict in the Middle East that has threatened the oil supply. Brent oil rose above $89 per barrel for the first time since early September, while U.S. crude reached a five-month high of $85 per barrel. Brent and U.S. crude prices have risen 15% and 19%, respectively, since the start of the year. Gas prices have also started to climb up ahead of the summer driving season. 
Precious metals like gold and silver took flight in March. The yellow metal logged its biggest monthly rise in more than three years in March, rising 8.5% on renewed expectations of U.S. interest rate cuts in June, strong safe-haven appeal and strong central bank buying. 
Meanwhile, silver prices climbed above the $25-an-ounce mark for the first time in 2024 on higher industrial and manufacturing demand. The global push for green energy, increasing demand in areas like 5G, a rebound in global computer shipments, the photovoltaics and automotive industries, and new sources of demand for sensors used in IoT and OLED lighting are propelling silver demand. 
Industrial metals, such as copper and nickel, are seeing upticks in prices, buoyed by supply concerns and robust demand, driven by increased production of electric vehicles. Notably, copper prices soared to an 11-month high in March following an agreement by China-based smelters to cut production. These smelters are responsible for processing half of the global copper supply. The copper market is tightening, with China smelter maintenance set to peak in April and May, which could hurt refined copper production, thereby hiking the price. 
Coming to agriculture commodities, cocoa prices nearly tripled in the first quarter to reach a level twice as high as the previous record set 50 years ago. The commodity skyrocketed to a new all-time high of more than $10,000 a ton from $3,000 a ton at the start of the year. A third consecutive year of supply shortages caused by poor harvests in West Africa led to the surge. 
We have profiled the ETFs below: 
United States Oil Fund (ARCA:USO) &ndash; Up 21.2% 
United States Oil Fund is the most popular ETF in the oil space, with an AUM of $1.4 billion and an average daily volume of 4 million shares. It seeks an average daily percentage change in USO&#39;s net asset value for any period of 30 successive valuation days within plus/minus 10% of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period. United States Oil Fund has an expense ratio of 0.60%. 
United States Brent Oil Fund (ARCA:BNO) &ndash; Up 19.7% 
United States Brent Oil Fund is designed to track the daily price movements of Brent crude oil. It provides exposure to the near-month futures contract traded on the ICE Futures Exchange. If the near-month futures contract is within two weeks of expiration, the benchmark will be the next-month contract to expire. BNO invests primarily in listed crude oil futures contracts and other oil-related futures contracts, and may invest in forwards and swap contracts. United States Brent Oil Fund amassed $134.2 million in its asset base, and charges 1.00% as annual fees and expenses. Volume is good as it exchanges 600,000 shares a day on average. 
Invesco DB Agriculture Fund (ARCA:DBA) &ndash; Up 19.4% 
Invesco DB Agriculture Fund tracks the DBIQ Diversified Agriculture Index Excess Return, a rules-based index composed of futures contracts on some of the most liquid and widely traded agricultural commodities. It has key holdings in cocoa, coffee and live cattle, with double-digit exposure each. Invesco DB Agriculture Fund charges 93 bps on an annual basis and trades in a volume of 406,000 shares a day. It has amassed $788.6 million in its asset base. 
United States Gasoline ETF (ARCA:UGA) &ndash; Up 18.9% 
United States Gasoline ETF is designed to track the movements of gasoline prices in percentage terms. The benchmark futures contract is the contract on gasoline as traded on the NYMEX. If the near-month contract is within two weeks of expiration, the benchmark will be the next-month contract to expire. United States Gasoline ETF is illiquid, with a daily trading volume of about 28,000, suggesting that investors have to pay extra beyond the annual fee of 0.97% per year. The fund has managed assets of $120.3 million. 
GraniteShares Gold Trust (ARCA:BAR) &ndash; Up 10.4% 
GraniteShares Gold Trust is designed to seek the performance of the price of gold. It provides an investment similar to an investment in gold through a Trust without having to open a metal account. It is among the lowest-cost gold ETFs on the market, having an expense ratio of 0.17%. GraniteShares Gold Trust has amassed $1 billion in its asset base while trading in an average daily volume of 663,000 shares.
<a href="https://www.zacks.com/stock/news/2249980/5-commodity-etfs-riding-high-in-2024?cid=CS-BENZ-FT-etf_news_and_commentary-2249980">To read this article on Zacks.com click here.</a>

5 Commodity ETFs Riding High in 2024

The price of an agricultural raw material basket has reached its highest level in more than nine years, driven by the skyrocketing surge in cocoa costs, stirring concerns among chocolate <a href="https://www.benzinga.com/topic/chocolate">lovers around the globe. </a>
The Invesco DB Agriculture Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBA#NYSE">DBA</a>) which tracks a broad group of agricultural commodities rose to $24.09 per share on Friday, marking an over 15% increase year to date and achieving heights last seen in mid-January 2015. 
Cocoa, which holds a weight of 21% in the DBA ETF, has seen its price rise by 112% year to date, outperforming stocks like Nvidia Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>). 
Cocoa futures have skyrocketed to nearly $9,000 per ton this week, setting a new historic peak.
Chart: Skyrocketing Cocoa Prices Turn Chocolate Bars More Valuable Than AI GPUs
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="495" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/22153521/image-49-1024x495.png" alt="" class="wp-image-262978" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/22153521/image-49-1024x495.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/22153521/image-49-300x145.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/22153521/image-49-768x372.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/22153521/image-49-1536x743.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/03/22153521/image-49.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
This dramatic increase is largely attributed to persistent concerns over tight supplies from West Africa, a region pivotal to global cocoa production.
These supply disruptions generate a significant imbalance in the global cocoa market, as the world is consuming much more cocoa than it can produce, leading to a sharp increase in prices.
Recent reports have heightened anxieties within the industry. As Reuters reported last week, major cocoa processing plants in the Ivory Coast and Ghana, countries that collectively produce nearly 60% of the world&#8217;s cocoa, have halted or reduced operations.
The inability to afford beans has been cited as a critical issue, prompting predictions of soaring chocolate prices worldwide. Chocolate manufacturers, already grappling with the repercussions of three consecutive years of poor harvests and anticipating a fourth, have begun to pass on the cost to consumers.
According to Steve Wateridge, head of research at Tropical Research Services, a massive demand destruction is needed to balance out the supply destruction. 
Essentially, this means reducing the consumption of cocoa to levels that the current supply can sustain. However, achieving this in practice is challenging, especially given the global affection for chocolate.
The International Cocoa Organization (ICCO) has projected a stark outlook for the global cocoa market, predicting that the deficit for the 2023/24 season would expand dramatically to 374,000 metric tons (MT) from 74,000 MT in the previous season. This anticipated deficit is largely due to adverse growing conditions and prevalent crop diseases.
For chocolate enthusiasts, the notion of reducing demand likely translates to consuming less chocolate or facing higher prices. The latter is already happening, as chocolate manufacturers increase prices to cope with the soaring costs of raw cocoa. The former, reducing consumption, is a more direct approach to demand destruction but is a hard sell to consumers who cherish their chocolate treats.
Read now: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/03/37894749/gold-rush-begins-as-fed-hints-at-rate-cuts-5-mining-stocks-glitter-with-over-30-ral">Gold Rush Begins As Fed Hints At Rate Cuts: 5 Mining Stocks Glitter With Over 30% Rally This Month</a>
Image generated using artificial intelligence with Midjourney.

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Agriculture Commodities Rise To 9-Year Highs, Cocoa Prices Skyrocket: Chocolate Lovers Brace For Hyperinflation

JPMorgan Chase recently reported second-quarter results, with both revenue and earnings exceeding Wall Street's expectations. But CEO Jamie Dimon is erring on the side of caution.
"There are still salient risks in the immediate view," he said in the earnings press release.
"Consumers are slowly using up their cash buffers, core inflation has been stubbornly high — increasing the risk that interest rates go higher and stay higher for longer — quantitative tightening of this scale has never occurred, fiscal deficits are large and the war in Ukraine continues, which in addition to the huge humanitarian crisis for Ukrainians, has large potential effects on geopolitics and the global economy."
It's not a rosy picture. In the earnings conference call, Dimon added that "headwinds are substantial and somewhat unprecedented."
So here's a closer look at three key risk factors Dimon highlighted and how investors can hedge against them.
<h2 class="wp-block-heading">High Core Inflation</h2>
In June, the consumer price index (CPI) rose 3% from a year ago, marking the smallest 12-month increase since March 2021. But core CPI — which excludes food and energy — increased 4.8% year over year.
Should core inflation persist at the "stubbornly high" levels Dimon cautioned about, your hard-earned money could progressively lose value because of the eroding effects of inflation.
Legendary investor Jim Rogers recently said that "the best place to be when you have inflation is real assets" like commodities.
Investors can gain exposure to commodities like gold, oil and agricultural products through exchange-traded funds (ETFs) such as SPDR Gold Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>) and Invesco DB Agriculture Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBA#NYSE">DBA</a>).
Real estate is another popular hedge against rising prices. When inflation occurs, the cost of raw materials and labor goes up, so constructing new properties becomes more expensive, which contributes to the appreciation of property values.
While buying a house can be a challenge in today's environment, new companies have innovated ways for people to <a href="https://www.benzinga.com/alternative-investments/platform/arrived-homes">earn passive income</a> in the real estate market. Here's how to <a href="https://www.benzinga.com/real-estate/22/10/29268850/bezos-backed-startup-lets-you-become-a-landlord-with-100-dollars">invest in rental properties with as little as $100</a> while staying completely hands-off.
<h2 class="wp-block-heading">Check out:</h2>
<ul>
<li>Passive income investments are one of the most trusted methods for riding out a recession so it's no surprise that people are turning to <a href="https://www.benzinga.com/real-estate/23/05/32554601/want-to-grow-your-wealth-passively-these-high-yield-real-estate-notes-might-be-your-holy-grail">high-yield notes that pay a fixed 7.5% to 9%.</a></li>
<li>Blackstone made a $13 billion bet on the growth in student housing. Here's how you can <a href="https://www.benzinga.com/real-estate/23/06/33080017/blackstone-bet-13-billion-on-the-impending-student-housing-price-surge-these-investors-are-doing-the">carve out your own piece of the student housing market with just $500</a>.</li>
</ul>
<h2 class="wp-block-heading">Quantitative Tightening</h2>
Quantitative tightening is a monetary policy that central banks use to reduce the money supply. They accomplish this by selling securities such as government bonds. As market participants buy the securities, the amount of money circulating in the economy decreases. This leads to higher interest rates, which can slow down economic activity.
The U.S. Federal Reserve has embraced quantitative tightening to tame rampant inflation. Since March 2022, the federal funds rate has been increased by 500 basis points.
While many businesses fear high-interest rates because they lead to increased borrowing costs and reduced consumer spending, it can be a different story for banks.
Banks make money from the spread between the interest rates at which they borrow and lend. When interest rates rise, it can lead to an expansion of their net interest margins.
JPMorgan's results illustrate this point. In the second quarter, the bank's net interest income surged 44% year over year to $21.9 billion.
Other than considering bank stocks, investors can also check out savings accounts as a way to ride the rate wave. Because of the Federal Reserve's aggressive rate hikes, there are now plenty of <a href="https://www.benzinga.com/money/best-savings-accounts">high-yield savings accounts</a> to choose from.
<h2 class="wp-block-heading">War In Ukraine</h2>
The Russia-Ukraine war has sent shockwaves across global markets. Geopolitical conflicts could disrupt supply chains, increase energy prices and create widespread uncertainty.
When tensions escalate, investors often turn to safe-haven assets. Gold is a classic example, as it has been considered a store of value in times of crisis.
U.S. Treasury bonds are also worth considering — they are backed by the U.S. government.&nbsp;
In addition, investors may also want to look into defensive stocks, which usually come from sectors less likely to be affected by economic downturns. Notable examples include consumer staples, utilities and healthcare — sectors where established companies experience consistent demand for their products and services, regardless of economic conditions.
Investors can access these sectors via ETFs such as Consumer Staples Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLP#NYSE">XLP</a>), iShares U.S. Utilities ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IDU#NYSE">IDU</a>) and Vanguard Healthcare ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VHT#NYSE">VHT</a>). Meanwhile, companies included in these ETFs could provide a starting point for further research.
<h2 class="wp-block-heading">Read next:</h2>
<ul>
<li><a href="https://www.benzinga.com/real-estate/22/10/29268850/bezos-backed-startup-lets-you-become-a-landlord-with-100-dollars">Bezos-Backed Startup Lets You Become A Landlord With $100</a></li>
<li><a href="https://www.benzinga.com/real-estate/23/05/32537165/elon-musk-is-bullish-on-austin-heres-how-to-invest-in-the-citys-growth-before-he-floods-it-with-new">Elon Musk Is Bullish On Austin. Here&#8217;s How To Invest In The City&#8217;s Growth Before He Floods It With New Tech Workers</a></li>
</ul>
Photo: Steve Jurvestson via&nbsp;<a href="https://www.flickr.com/photos/jurvetson/8362210873/in/photolist-dJWvXx-bg6vWP-DjqVuL-q15ADn-cgsPXw-jxvDvY-eF1K2G-jxwPGQ-YDDCdS-eF2b7b-bjFgVe-eF1Q6w-eEY6rh-ZFCTDm-eEYdVY-ZFCVmj-YDDyVj-LPVSd6-ZFCXJW-eEUB38-YCKtHZ-eEUBQr-YDDHYj-YDDNym-chKEyU-chKH5E-chKEbw-chKE9Y-chKGJC-eEUAcH-chKHtQ-chKFVu-chKFsm-eEUJJV-chKEaQ-chKGo9-eEUEiv-eF1P8f-eF1FEo-eESvV2-eEUFUk-eEUDuD-eEURi8-eF1Mv3-eF1ULL-eEUXQc-chKF5q-eEV1hp-eF1VJh-eEYxZh" target="_blank" rel="noreferrer noopener">Flickr Creative Commons</a>

iShares Trust Dow Jones US Utilities Sector Index Fund

'Headwinds Are Substantial': Jamie Dimon Just Flagged A Long List Of Serious Dangers To The US Economy — Here Are 3 'Salient' Risks And How To Defend Against Them

Producer Price Index (PPI) inflation data for May, to be released on Wednesday, June 14, will set the stage for the highly anticipated Federal Reserve meeting where <a href="https://www.benzinga.com/etfs/broad-u-s-equity-etfs/23/06/32833950/surprise-dip-in-may-inflation-raises-hopes-for-pause-in-fed-rate-hikes" target="_blank" rel="noreferrer noopener">interest rates will be determined.</a>
The market&#8217;s expectations of the Fed&#8217;s rate hikes coming to an end were solidified after Tuesday&#8217;s CPI report revealed a lower-than-expected decline in consumer inflation. 
The upcoming producer inflation data could provide additional evidence of a disinflationary trend, potentially swaying Fed members to reconsider the need for future interest rate increases.
<h2 class="wp-block-heading">Producer Price Inflation Preview: What Do Economists Expect?</h2>
<ul>
<li>Economists forecast that producer inflation in the U.S. could decrease to as low as 1.5% in May, down from April&#8217;s 2.3%, marking the lowest level since January 2021. This would extend the streak of 12 consecutive declines in producer price inflation.</li>
<li>Producer prices are also projected to fall significantly below their 10-year average of 2.7%.</li>
<li>Monthly estimates show a 0.1% reduction in producer prices, the second negative reading&nbsp;in 2023.</li>
<li>Core PPI, excluding energy and food, is predicted to fall from 3.2% in April to 2.9% in May, its lowest level since March 2021. The monthly core PPI is expected to stay unchanged at 0.2%.</li>
<li>Food (down 0.5%) and transportation and warehousing (down 1.7%) subindices experienced monthly contractions in April, with the latter seeing four consecutive months of decrease.</li>
</ul>
Chart: PPI Inflation Is Falling Off A Cliff 
<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="819" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13120420/USPPIYY_2023-06-13_18-03-45_5f6b6-1024x819.png" alt="" class="wp-image-51373" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13120420/USPPIYY_2023-06-13_18-03-45_5f6b6-1024x819.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13120420/USPPIYY_2023-06-13_18-03-45_5f6b6-300x240.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13120420/USPPIYY_2023-06-13_18-03-45_5f6b6-768x614.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13120420/USPPIYY_2023-06-13_18-03-45_5f6b6.png 1468w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Read Now: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/23/06/32838442/energy-driven-cpi-drop-in-may-contrasts-with-persistent-core-cpi-5-economists-specu" target="_blank" rel="noreferrer noopener">Energy-Driven CPI Drop In May Contrasts With Persistent Core CPI: 5 Economists Speculate On Fed&#8217;s Next Move</a>
<h2 class="wp-block-heading">Commodity Prices Tumbled in May, Putting Additional Downside&nbsp;Pressure To PPI: 5 Commodity ETFs To Watch</h2>
Global commodities prices fell across the board in May, as COVID-19-related supply chain disruption further&nbsp;vanished&nbsp;and China&#8217;s economic recovery moved slower than expected.
The iShares S&amp;P GSCI Commodity-Indexed Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GSG#NYSE">GSG</a>), an exchange-traded fund that provides broad exposure to a diversified basket of commodities, including energy, agriculture, industrial metals and precious metals, fell nearly 4% in May. GSG is 6% down year-to-date. 
The Invesco DB Agriculture Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBA#NYSE">DBA</a>), an exchange-traded fund that invests in a basket of agricultural commodities such as corn, wheat, soybeans and sugar, eased 2.3% last month. DBA is 7% higher year-to-date
The United States Oil Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USO#NYSE">USO</a>), the largest exchange-traded fund investing in contracts on WTI crude oil and other oil-related derivatives, plummeted more than 10% last month. USO is 8.3% lower year to date. 
The Invesco DB Base Metals Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBB#NYSE">DBB</a>), an exchange-traded fund that invests in a basket of industrial metals like copper, zinc, nickel, tin and aluminum, tumbled 7% last month. DBB is 5.9% weaker year to date. 
The Aberdeen Physical Precious Metals Basket Shares ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLTR#NYSE">GLTR</a>), which provides investors with exposure to a basket of precious metals, also fell 3.5% last month. GLTR is 0.9% up year-to-date. 
Other than physical commodities, sharp declines in freight costs were also observed in May, with the Baltic Dry Index, widely regarded as the most popular global shipping costs index, plummeting 39%. 
<figure class="wp-block-table"> 
<table>
<thead>
<tr>
<th>ETF Name</th>
<th>Ticker</th>
<th>Commodity Type</th>
<th>% Change in May</th>
<th>% Change Year to Date</th>
</tr>
</thead>
<tbody>
<tr>
<td>iShares S&amp;P GSCI Commodity-Indexed Trust</td>
<td>GSG</td>
<td>Broad basket of commodities</td>
<td>-4.0%</td>
<td>-6.0%</td>
</tr>
<tr>
<td>Invesco DB Agriculture Fund</td>
<td>DBA</td>
<td>Agricultural commodities</td>
<td>-2.3%</td>
<td>+7.0%</td>
</tr>
<tr>
<td>United States Oil Fund</td>
<td>USO</td>
<td>WTI crude oil and derivatives</td>
<td>-10.0%</td>
<td>-8.3%</td>
</tr>
<tr>
<td>Invesco DB Base Metals Fund</td>
<td>DBB</td>
<td>Industrial metals</td>
<td>-7.0%</td>
<td>-5.9%</td>
</tr>
<tr>
<td>Aberdeen Physical Precious Metals Basket Shares ETF</td>
<td>GLTR</td>
<td>Basket of precious metals</td>
<td>-3.5%</td>
<td>+0.9%</td>
</tr>
</tbody>
</table>
</figure>
Chart: Commodity ETFs&#8217; Year-to-Date Performance
<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1024" height="733" src="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13113643/GLTR_2023-06-13_17-36-05_3512c-1024x733.png" alt="" class="wp-image-51369" srcset="https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13113643/GLTR_2023-06-13_17-36-05_3512c-1024x733.png 1024w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13113643/GLTR_2023-06-13_17-36-05_3512c-300x215.png 300w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13113643/GLTR_2023-06-13_17-36-05_3512c-768x550.png 768w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13113643/GLTR_2023-06-13_17-36-05_3512c-1536x1099.png 1536w,https://s3.amazonaws.com/editorial.benzinga.com/wp-content/uploads/2023/06/13113643/GLTR_2023-06-13_17-36-05_3512c.png 1724w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
Photo: Shutterstock

Macro Economic Events

Economics

ETFS Physical Precious Metal Basket Shares

GLTR

5 Commodity ETFs To Watch When PPI Inflation Data Drops Wednesday

Ginkgo Bioworks (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DNA#NYSE">DNA</a>), the leading horizontal platform for cell programming, today announced a collaboration with Merck, known as MSD outside&nbsp;the United States&nbsp;and&nbsp;Canada, to engineer up to four enzymes for use as biocatalysts in Merck&#39;s active pharmaceutical ingredient (API) manufacturing efforts. Through this collaboration, Ginkgo will leverage its extensive experience in cell engineering and enzyme design, as well as its capabilities in automated high throughput screening, manufacturing process development/optimization, bioinformatics and analytics to deliver optimal strains for expression of targeted biocatalysts.
Biocatalysis is a sustainable and often more effective alternative to some chemical synthesis steps in industrial chemical synthesis. The inherent stereospecificity of enzyme biocatalysts can reduce costly synthesis and purification steps, thereby decreasing production costs. Through this collaboration, Ginkgo aims to optimize several biocatalysts by leveraging its world-class proprietary fungal strains, cell line development, enzyme engineering and optimization, and multiomics expertise.
&quot;Ginkgo&#39;s fungal strains present a major opportunity for improving biocatalysis.&nbsp;E. coli&nbsp;is currently the mainstay host for expressing enzymes, but a large number of enzymes will not express properly in&nbsp;E. coli, and those that do express in&nbsp;E. coli&nbsp;may have better homologs that only express in fungal strains,&quot; said&nbsp;Behzad Mahdavi, Senior Vice President of Biopharma Manufacturing and Life Sciences Tools at Ginkgo. &quot;This enzyme optimization project with Merck has the potential to help reduce the cost of goods and enable a more robust supply chain for APIs.&quot;
&quot;Merck is a pioneer in biocatalysis, improving manufacturing of crucial medicines. We&#39;re thrilled to be partnering with Merck, and to be leveraging our platform capabilities for improved enzyme activity and production&quot; said&nbsp;Jason Kelly, co-founder and CEO at Ginkgo. &quot;Ginkgo&#39;s platform model enables us to identify improved enzymes and develop powerful fungal strains and fermentation processes for enzyme manufacturing, empowering downstream API production for our customers.&quot;
Under the terms of the collaboration, Ginkgo will earn an upfront research and development fee and is eligible for success-based research and development milestone payments. In addition, Ginkgo is eligible to earn commercial milestone payments for each of a specified number of biocatalysis targets, which have the potential to total, in the aggregate, up to&nbsp;$144 million. To learn more about Ginkgo&#39;s work in enzyme discovery, visit&nbsp;ginkgobioworks.com/our work/enzyme-discovery.

Ginkgo Bioworks Announces Collaboration With Merck To Improve Active Pharmaceutical Ingredient Manufacturing; Gingko Eligible For Up Tp $144M In Milestone Payments

CORN

RIBT

Market Vectors Russia ETF Trust Shares of Beneficial Interest

Russia To Ban Rice Exports From July 1 To Dec. 31

<a href="https://www.wsj.com/articles/u-n-seeks-to-ease-russian-blockade-of-ukraine-grain-shipping-to-avert-food-shortages-11652717161?mod=Searchresults_pos1&amp;page=1" title="https://www.wsj.com/articles/u-n-seeks-to-ease-russian-blockade-of-ukraine-grain-shipping-to-avert-food-shortages-11652717161?mod=Searchresults_pos1&amp;page=1">https://www.wsj.com/articles/u-n-seeks-to-ease-russian-blockade-of-ukraine-grain-shipping-to-avert-food-shortages-11652717161?mod=Searchresults_pos1&amp;page=1</a>

'U.N. Seeks to Ease Russian Blockade of Ukraine Grain Shipping to Avert Food Shortages' -WSJ

On Thursday, shares of Invesco DB Agriculture Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DBA#NYSE">DBA</a>) saw unusual options activity. After the option alert, the stock price moved down to $19.12. 
<ul>
<li>Sentiment: NEUTRAL</li>
<li>Option Type: TRADE</li>
<li>Trade Type: CALL</li>
<li>Expiration Date: 2021-08-20</li>
<li>Strike Price: $17.00</li>
<li>Volume: 1000</li>
<li>Open Interest: 5125</li>
</ul>
<h2>Three Signs Of Unusual Options Activity</h2>
Extraordinarily large volume (compared to historical averages) is one indication of unusual options market activity. Volume refers to the total number of contracts traded over a given time period when discussing options market activity. Open interest is the number of unsettled contracts that have been traded but not yet closed by either counterparty. In other words, open interest represents the quantity of contracts that individual parties have written but not yet found a counterparty for (i.e. a buyer finding a seller, or a seller finding a buyer).
Another sign of unusual activity is the trading of a contract with an expiration date in the distant future. Usually, additional time until a contract expires allows more opportunity for it to reach its strike price and grow its time value. Time value is important to consider because it represents the difference between the strike price and the value of the underlying asset. 
Contracts that are "out of the money" are also indicative of unusual options activity. "Out of the money" contracts occur when the underlying price is under the strike price on a call option, or above the strike price on a put option. These trades are made with the expectation that the value of the underlying asset is going to change dramatically in the future, and buyers and sellers will benefit from a greater profit margin. 
<h2>Bullish And Bearish Sentiments</h2>
Options are "bullish" when a call is purchased at/near ask price or a put is sold at/near bid price. Options are "bearish" when a call is sold at/near bid price or a put is bought at/near ask price. 
These observations are made without knowing the investor's true intent by purchasing these options contracts. The activity is suggestive of these strategies, but an observer cannot be sure if a bettor is playing the contract outright or if the options bettor is hedging a large underlying position in common stock. For the latter case, bullish options activity may be less meaningful than the exposure a large investor has on their short position in common stock.
<h2>Trading Options With These Strategies</h2>
Unusual options activity is an advantageous strategy that may greatly reward an investor if they are highly skilled, but for the less experienced trader, it should remain as another tool to make an educated investment decision while taking other observations into account.
For more information to understand options alerts, visit <a href="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts" title="https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts">https://pro.benzinga.help/en/articles/1769505-how-do-i-understand-options-alerts</a>

Options

Unusual Options Activity Insight: Invesco DB Agriculture Fund

The inflation data released Tuesday&nbsp;should convince investors that inflation isn&rsquo;t just transitory. The headline Consumer Price Index, measured year over year, was up 5.4% in June.
The core rate, which doesn&rsquo;t include food or energy, was up 4.5%. This blew away the estimates of 3.8% and was the largest move higher since September 1991.
Fortunately, some ETFs can be used to hedge stock portfolios against this inflation risk. They can even be used to profit in inflationary environments. One of them is the Invesco DB Agriculture Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dba#NYSE">DBA</a>).
This fund invests in agricultural commodities like wheat and soybeans. If their prices move higher, so should DBA.
<img alt="dba_0.png" src="https://www.benzinga.com/files/u344550/dba_0.png" style="height:400px; width:640px" />

This ETF Is An Inflation Hedge

While the pundits debate whether or not inflation is rising, the markets have spoken. And the answer is a resounding &ldquo;yes!&rdquo;
This inflation has caused commodity-based ETFs to rocket higher. This includes the Teucrium Corn Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/corn#NYSE">CORN</a>) and the Invesco DB Agriculture Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dba#NYSE">DBA</a>).
The Teucrium Corn Fund invests in corn futures. Since August the price of corn has doubled and&nbsp;CORN has gained almost 20% in the past month.
<img alt="corn.png" src="https://www.benzinga.com/files/u344550/corn.png" style="height:400px; width:640px" />
The Invesco DB Agriculture Fund&nbsp;invests in a wide range of agricultural futures. They include corn, soybeans, sugar, coffee, cocoa&nbsp;and cattle.
The ETF has gained almost 10% over the past month.
<img alt="dba.png" src="https://www.benzinga.com/files/u344550/dba.png" style="height:400px; width:640px" />

2 Commodity ETFs That Have Broken Out

<a href="https://www.bloomberg.com/news/articles/2021-01-16/blankfein-called-it-now-the-whole-world-is-watching-commodities?sref=TBDibEcD">Bloomberg </a>this weekend reported on the boom that is taking shape in the commodities markets.
What Happened: Investors are moving from the bull market in stocks to areas further afield in search of returns in a very-low interest rate environment.
&quot;Commodities haven&rsquo;t been this sexy since the mid-2000s, when China was stockpiling everything from copper to cotton,&quot; Bloomberg reports.
The story points to several developments:
<ul>
<li>JPMorgan Chase &amp; Co. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/jpm#NYSE">JPM</a>) recommending a move away from bonds toward materials</li>
<li>Hedge fund bets at their highest levels in a decade, totalling nearly $120 billion</li>
<li>Agricultural markets also up more than 30% in the last decade</li>
<li>Corn at a seven-year high</li>
<li>Soybeans and wheat at their highest prices since 2014</li>
<li>Copper having the potential to rally&nbsp;20% to more than $10,000 a metric ton, according to Francisco Blanch, head of global commodities research at Bank of America</li>
</ul>
Quick Ways To Jump In: If this makes you itchy to get in on the action, then here are three ETFs and two copper funds that can give you exposure to metals and agriculture, which we&nbsp;gathered by asking around the Benzinga staff for some quick ways to place bets.
Note that this is by no means a comprehensive list but some simple ways to buy if you believe these commodities will continue their rise.
<ul>
<li>Invesco DB Agriculture Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dba#NYSE">DBA</a>) With $691.8 million in assets under management, this is one of the largest ETFs that holds actual agricultural commodities. Its 26-week return rate stands at&nbsp;20.79%, according to ETF Database.&nbsp;Its share price is up&nbsp;20.79% over the past six months and closed last week at&nbsp;$16.56.</li>
<li>For an ETF that holds&nbsp;agricultural stocks, the largest is&nbsp;VanEck Vectors Agribusiness ETF&nbsp;(NYSE: <a class="ticker" href="https://www.benzinga.com/stock/moo#NYSE">MOO</a>). It has $914.5 million in assets under management and &quot;the&nbsp;best ticker symbol out there,&quot; says Spencer Israel, producer of Benzinga&#39;s <a href="https://www.benzinga.com/premarket-prep/">PreMarket Prep</a>.&nbsp;It has a 26-week return rate of&nbsp;31.32%, according to ETF Database.&nbsp;It is up&nbsp;29.89% over the past six months and closed last week at&nbsp;$82.14.</li>
<li>The VanEck Vectors Rare Earth/Strategic Metals ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/remx#NYSE">REMX</a>) holds stocks of companies that produce rare earth&nbsp;metals&nbsp;such as titanium, molybdenum, cerium, manganese&nbsp;and tungsten. It has&nbsp;$421.1 million in&nbsp;assets under management. The ETF&#39;s 26-week return rate is 89.57%, and its share price closed last week at&nbsp;$72.38, up 87.90% over six months.</li>
<li>For pure copper plays, also look into the&nbsp;Barclays iPath Bloomberg Copper Subindex (NYSEARCA: JJC), which is an exchange-traded note, and the&nbsp;United States Copper Index Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/cper#NYSE">CPER</a>), an exchange-traded product.</li>
</ul>
Image source: Pexels

Futures

CPER

Market Vectors Rare Earth/Strategic Metals Etf

REMX

Commodities May Be The Next Big Thing; Here Are 3 ETFs To Get Started

U.S. State Attorney General Asking DOJ For Antitrust Probe Of Meatpacking Industry

Due to uncertainty surrounding global trading conditions and the surging performance of equity investments through the first few months of 2019, traders have struggled to find a compelling upside in the commodity markets this year.
However, March may mark a turning point in the near-term prospects of many raw goods. The prices for oil and metals are still pushing year-to-date highs, while agricultural and soft commodities like soybeans and sugar have bounced from recent lows to cut some of the losses sustained since the U.S.-China tariffs took effect in mid-2018.
Now might be the time to find broad exposure to the commodities markets, and we can use the AI model portfolios on <a href="https://www.quantamize.com/About/Learn-More?utm_source=Bezinga&amp;utm_medium=Article&amp;utm_campaign=in-Growth-From-The-Ground-Up">Quantamize</a> to discover which commodity ETFs to be overweight heading into spring. Each <a href="https://www.quantamize.com/Marketing/Q-Folios?utm_source=Bezinga&amp;utm_medium=Article&amp;utm_campaign=in-Growth-From-The-Ground-Up">Quantamize Q-Folio </a>is rebalanced monthly to best position each investment theme for diversified alpha capture based on the model&rsquo;s multi-factor analysis
Using Quantamize&rsquo;s Commodities ETF Model Portfolio, we can see that agricultural and precious metal ETFs represent the portfolio&rsquo;s top ETF holdings.
<a href="https://www.benzinga.com/files/u105576/image2_11.png" onclick="imce.send('image2_11.png'); return false;" title=""><img alt="image2_11.png" src="https://www.benzinga.com/files/u105576/image2_11.png" /></a> Image courtesy of Quantamize
For the soft commodities, the Invesco DB Agricultural Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dba#NYSE">DBA</a>) provides fairly broad exposure to an array of heavily traded agriculture goods, although its top holdings are primarily weighted toward cattle, soybean and sugar contracts.
<a href="https://www.benzinga.com/files/u105576/1_26.png" onclick="imce.send('1_26.png'); return false;" title=""><img alt="1_26.png" src="https://www.benzinga.com/files/u105576/1_26.png" /></a> Image courtesy of Quantamize
Each of the Invesco agricultural ETFs top holdings has seen an uptick through March, in part due to positive trade signals and inclement planting weather driving down yield estimates. However, while sugar has made a 50 percent retracement towards its 12-month high, soybeans are struggling to remain consistently above $9 in the face of continuing trade friction between the U.S., a major producer of soybeans, and China, its biggest trading partner.
On the surface, that would make Q-Folio&rsquo;s weighting in Tecrium Soybean Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/soyb#NYSE">SOYB</a>) somewhat perplexing.
<a href="https://www.benzinga.com/files/u105576/2_19.png" onclick="imce.send('2_19.png'); return false;" title=""><img alt="2_19.png" src="https://www.benzinga.com/files/u105576/2_19.png" /></a> Image courtesy of Quantamize
Both soybeans and SOYB made new 2019 lows midway through March. However, Chinese trade data from January indicates that, in spite of the tariffs, there was a month-over-month increase of more than double the amount of U.S. soybeans imported to China. What&rsquo;s more, negotiations between the nations&rsquo; trade officials have ensured the sale of an additional 10 million tons of soybeans to China, although that won&rsquo;t likely materialize until a larger agreement to ease trade tensions is reached.
Technically, the recent low coupled with the slow and steady progress on the trade front could help the bean rebound from its early March dip and, ideally, post some positive gains in the coming weeks.
<h3>Don&rsquo;t Forget The Yellow Metal</h3>
The third largest weighting in Quantamize&rsquo;s Commodities ETF Model Portfolio is the SPDR Gold Trust (NYSE:SPDR) ETF, a perfect counterbalance to the trade uncertainty weighing on most of the rest of the commodities market.
Year-to-date, both GLD and gold have been relatively flat. However, gold&rsquo;s climb through the waning months of 2018 helped it retake levels it hadn&rsquo;t seen in more than six months. This has led to a recent uptick in redemptions from the fund, which you can see in the ETFs fund flow data, though its six-month flow remains net positive. This makes it an attractive medium-term hedge within the portfolio.
<a href="https://www.benzinga.com/files/u105576/3_15.png" onclick="imce.send('3_15.png'); return false;" title=""><img alt="3_15.png" src="https://www.benzinga.com/files/u105576/3_15.png" /></a> Image courtesy of Quantamize
Overall, the Q-Folio model seems to be bullish on the indications coming from the agricultural sector, while also leaving room for a prolonged battle over trading conditions between the world&rsquo;s two largest economies. The moral seems to be that the market&rsquo;s deepest held hopes for a resolution will be rewarded eventually, but don&rsquo;t bet the farm on it.
Quantamize is a content partner of Benzinga

Long Ideas

SOYB

Growth From The Ground Up: A Model ETF Portfolio For An Agriculture And Precious Metals Hedge

Commodity and forex trader and Factory Trading founder Peter Brandt joined <a href="http://premarket.benzinga.com/pre-market-show/">PreMarket Prep</a> on Wednesday to discuss a number of topics, including tariffs, interest rates, crude oil, bitcoin and gold.
Brandt is looking forward to trading in his sixth different decade when 2020 rolls around, and he shared some of his trading wisdom with listeners.
<h3>Trouble For Trump</h3>
Most commodity prices have been hit hard thanks to the international trade war, and Brandt said President Trump needs to remember in which states his supporters live or he could be in trouble.
&ldquo;You take a look at where corn&nbsp;and wheat and beans are grown, and it&rsquo;s states that were won by Trump,&rdquo; Brandt said. &ldquo;Everybody&rsquo;s focusing for the election on immigration; no one&rsquo;s talking about farm prices. I think the Trump White House is in big trouble if for no other reason than egg prices are skidding along the bottom of a 20-year low.&rdquo;
<h3>Interest Rates</h3>
Brandt said he&rsquo;s not buying the fears that rising interest rates will hurt stock prices.
&ldquo;If the stock market gets hit, it&rsquo;s not going to be because of rates,&rdquo; he said. &ldquo;I took a mortgage out in 1983 at 14 percent. These interest rates are mild. This economy can certainly handle 5 or 6 percent T bill rates.&rdquo;
<h3>Oil Outlook</h3>
Brandt also said crude oil prices could certainly continue higher, but additional upside may be limited at this point.
&ldquo;There&rsquo;s going to be a point at which fundamentals start to change again, and we&rsquo;re already seeing supply start to come back online,&rdquo; he said. &ldquo;I don&rsquo;t know where we go from here, but we could get back into the $80&#39;s I suppose. For me, there&rsquo;s no chart signal, so there&rsquo;s no trade.&rdquo;
<h3>Bitcoin&rsquo;s Bust</h3>
Brandt also discussed bitcoin&#39;s huge 2018 sell-off. He said that assuming bitcoin is the best expression of distributed ledger technology, long-term bulls need to keep the 2018 sell-off and the 2017 run-up in perspective.
&ldquo;There&rsquo;s never been a market like the bitcoin market, that I can find,&rdquo; Brandt said about the 2017 run. &ldquo;It takes a long time then to digest those gains...and it usually takes a lot longer than anyone thinks.&rdquo;
&ldquo;The average peak to valley to eventually new peak in bitcoin&#39;s history as an instrument is 89 weeks, and that&rsquo;s closer to two years than one year,&rdquo; he said.
<h3>Gold Losing Its Luster</h3>
Finally, Brandt weighed in on gold prices, which have been dropping of late no matter which direction the stock market heads.
&ldquo;I think the December 2017 lows are going to be crucial in gold,&rdquo; he said. &ldquo;Gold has big headwind--gold&rsquo;s at 80 times the price of silver, 1.5 times the price of platinum.&rdquo;
&ldquo;If I still was short gold, I&rsquo;d still be hanging with it. Markets always provide a surprise, and the surprise in gold could be we go down and test the $1,000 level again.&rdquo;
<a href="http://www.youtube.com/watch?time_continue=1&amp;v=qnBPisnvZ58">Click here</a> to watch Brandt&#39;s full interview.
<h3>Price Action</h3>
Here&rsquo;s a look at how some of the popular ETFs related to the commodities Brandt discussed have been trading so far in 2018:
<ul>
<li>PowerShares DB Agriculture Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dba#NYSE">DBA</a>) is down 4.9 percent.</li>
<li>United States Oil Fund LP (ETF) (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/uso#NYSE">USO</a>) is up 24.1 percent.</li>
<li>Bitcoin Investment Trust (OTC: <a class="ticker" href="https://www.benzinga.com/stock/gbtc#OTC">GBTC</a>) is down 61.1 percent.</li>
<li>SPDR Gold Shares (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/gld#NYSE">GLD</a>) is down 4.1 percent.</li>
</ul>
Related Links:
<a href="https://www.benzinga.com/news/17/06/9572095/grown-from-grain-peter-brandt-to-talk-career-market-philosophy-on-premarket-prep">Grown From Grain: Peter Brandt To Talk Career, Market Philosophy</a>
<a href="https://www.benzinga.com/investing/what-is-a-commodity/">What is a Commodity?</a>

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