There has been a lot off bearishness on oil lately, including from this publication. However, in one of the few bullish pieces recently, Citi has said it expects oil to rise. The banks says that supply disruptions in Nigeria are set to persist, and that oil prices around $40 are set to spur demand. The article goes into some nitty gritty arguments regarding supply, calling the projected increase in Libyan output a “headfake”. It also says other supply may fall or be disrupted as well. Citi summarized its view this way, saying “Oil prices for the remainder of second-half 2016 have a number of hurdles to overcome, most notably the tempered outlook for refinery runs as a result of weak margins, which will further weigh on prompt crude demand and the sizeable excess of oil in storage … But oil at $40 a barrel is likely to spur investor, commercial and physical demand”.

FINSUM: This was one of the most bearish “bull” statements ever. We do not actually take this as much of a long-term positive.

Source: Bloomberg

(New York)

Barron’s has published a new article telling investors how they can profit from the coming jump in inflation. S&P has said that it sees inflation rising next year after falling until the middle of 2017. The forecast is based on the tight correlation between commodity prices and inflation. If you believe the argument, which Barron’s says carries a lot of weight, then you can buy inflation hedges in a number of ways. TIPS, for instance, or Treasury Inflation-Protected Securities, could be a profitable bond purchase if inflation starts to rise, and you can get exposure to these via ETFs. Gold is another obvious way to protect against inflation, and a gold ETF may be a good choice. Investing directly in commodities is another way to do it, and unsurprisingly, these can be accessed via ETFs like the iShares S&P GSCI Commodity-Indexed Trust.

FINSUM: If fiscal stimulus happens, we definitely think inflation will once again become an issue, which means getting into these asset classes now could prove very lucrative in the long-term.

Source: Barron’s


No matter who wins this election, one thing seems certain—there is going to be a war on inequality. The masses on both sides of the political divide are furious about the growing gap between rich and poor, and either candidate is likely to put new policies in place that will attempt to lower the divide. This Bloomberg article tells investors where to put their money when the battle against inequality starts. The piece is based on research by Bank of America, and goes through three scenarios: a redistributive policy shift, a protectionist policy shift, or a Keynesian policy shift. Bank of America advises exactly where to put your assets in each scenario, such as in TIPS for redistributive or Keynesian shifts, or long government bonds in the protectionist scenario.

FINSUM: This is a very insightful and clear article about where to put your money in three likely scenarios. A must read for any investor.

Source: Bloomberg

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