Catalyzed by the drop in US CPI inflation in June, near-term recession risk has moderated and the focus has shifted closer to the market’s favored scenario of a painless disinflation and economic soft landing. Amidst a broad-based rally in risky assets, commodities stand out as under-valued, under-owned, and backed by compelling fundamentals and technicals—a good entry point for a catch-up tactical allocation. The BCOM index gained 5% in July, but there is likely more where this came from. Should recessionary fears not materialize over the next six months, idiosyncratic risks leave the entire complex exposed to the upside, with the rally in BCOM extending. In order of preference, we favor natural gas, ags, oil and gold, and maintain neutral stance on base metals.

Speakers:

Natasha Kaneva, Global Commodities

Shikha Chaturvedi, Global Commodities

Gregory Shearer, Global Commodities

Tracey Allen, Global Commodities

This podcast was recorded on July 21, 2023.

This communication is provided for information purposes only. Institutional clients can view the related report at www.jpmm.com/research/content/GPS-4462795-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.