hurricanemaxi
Joined: 17 Sep 2011
Posts: 83
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 Posted: Mon Dec 05, 2011 1:11 pm Post subject: Economy Avoiding ‘Death Spiral’ Boosts Bullish Fund |
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Hedge funds boosted wagers on higher commodity prices for the first time in three weeks as the outlook for the U.S. economy improved.
Money managers increased combined bullish positions across 18 U.S. futures and options by 0.7 percent to 566,494 contracts in the week ended Nov. 29, Commodity Futures Trading Commission data show. Investors trimmed their bearish holdings in copper for the first time in four weeks, and pared bets on lower wheat and soybean prices.
The value of world equities rose more than $2.2 trillion last week as the MSCI All-Country World Index climbed for five consecutive days, the longest rally since October. The Federal Reserve and five other central banks made it easier and cheaper for banks to obtain dollars in emergencies and China, the biggest consumer of everything from energy to copper to soybeans, lowered banks’ reserve requirements for the first time since 2008. The U.S. jobless rate fell to a two-year low in November.
“We’re more on a moderate growth path, not the death spiral people feared two months ago,” said Michael Strauss, who helps oversee about $27 billion of assets as the chief investment strategist at Commonfund in Wilton, Connecticut. “That puts a little bit more support into commodities.”
Copper Rallies
The Standard & Poor’s GSCI Commodity Index jumped 3.5 percent last week, the most since mid-October, led by copper, zinc and aluminum. The MSCI All-Country World Index gained 8.4 percent while the Dollar Index, a measure against six trading partners, slipped 1.3 percent. The yield on 10-year Treasuries rose 7 basis points, or 0.07 percentage point, according to Bloomberg Bond Trader prices.
Twenty-one of the 24 commodities tracked by the GSCI rose last week, while coffee, hogs and cocoa declined. Copper rose 9.2 percent, the most in five weeks, and wheat gained 6.2 percent in the biggest advance since mid-July.
Commodities will return 15 percent in the next 12 months, led by industrial metals and energy, Goldman Sachs Group Inc. said in a report Dec. 1. The S&P GSCI rebounded 16 percent since Oct. 4, when mounting concern about the European debt crisis drove the index to the lowest since November 2010.
U.S. consumer confidence surged in November by the most in eight years, the Conference Board, a New York-based private research group, reported Nov. 29. Manufacturing expanded at the fastest speed in five months, according to the Institute for Supply Management’s factory index on Dec. 1.
80 Commodities
Four of the six largest automakers in the U.S. beat analysts’ expectations in November, boosting industry sales to the fastest pace since August 2009, Woodcliff Lake, New Jersey- based Autodata Corp. reported Dec. 1. Palladium, used mostly in catalytic converters, surged 13 percent last week, the most of any of the 80 commodities tracked by Bloomberg.
The GSCI gauge climbed 1.6 percent last month for a second consecutive gain. While the index is 13 percent lower than the 32-month high reached in April, it’s still up 4.9 percent for the year. When economies tumbled into recession in 2008, the gauge fell as much as 66 percent. The measure rose as much as 1.2 percent today.
China’s growth may slow to 8.5 percent next year, compared with 9.3 percent in 2011, the Organization for Economic Cooperation and Development in Paris said in a report Nov. 28. Chinese manufacturing slowed last month to the weakest since February 2009, according to an index from the China Federation of Logistics and Purchasing.
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