On Wednesday, Caterpillar (CAT)–one of the biggest manufacturers of construction and mining equipment–posted lower-than-expected quarterly results and cut its full year forecast. The bellwether cited weak demand from its mining customers, its most profitable product category, as the primary source of Caterpillar’s sour quarter. In 2014, Caterpillar estimates revenue will be essentially flat to +/-5% compared to 2013. For the year, the company now expects revenues to come in around $55 billion versus the previously forecasted $58 billion figure [for more commodity news and analysis subscribe to our free newsletter].
Domestic equities have managed to return to their bullish ways as easing concerns over U.S. military involvement in Syria have helped some of the uncertainty that’s been plaguing investors’ confidence on Wall Street. Furthermore, investors rejoiced after Larry Summers withdrew his bid for Fed chairman earlier this week, showcasing the market’s concerns over the abandonment of “ultra loose” monetary policy [for more commodity futures news and analysis subscribe to our free newsletter].
When you sit down for a cold beer, you probably don’t think of all of the factors that culminated to create the product. What’s more, you probably never consider the fact that the London Metal Exchange (LME) could have such a marked impact on the frosty beverage. But traders utilizing the LME to purchase aluminum for beer cans have recently reiterated issues that the exchange is causing, putting beer prices in a pinch [for more aluminum news and analysis subscribe to our free newsletter].
One of the biggest names in aluminum production and exploration, Pittsburgh based Alcoa (AA) is one of the best known firms in the commodity world. The company operates in over thirty countries and is only rivaled in size by international firms Rio Tinto (RIO) and Rusal. Falling prey to a struggling industrial sector, Alcoa and many other mining corporations have been feeling the pressure since the recession began in late 2008. With their first quarter earnings report coming up on Monday, all eyes will be fixated on the materials giant [for more metals news and analysis subscribe to our free newsletter].
In the commodity world, lithium is a rising star as its use and prevalence has skyrocketed in recent years. Thanks to a wealth of new technologies, lithium is slowly becoming a staple metal for a number of products and industries. As one of the lightest metals out there, lithium is used widely in pharma, ceramics, aluminu, and a number of clean technology processes. Given its wide spread, it should be no surprise that the commodity has also grown as an investment in recent years [for more lithium news and analysis subscribe to our free newsletter].
Steel has been known to mankind for thousands of years; its use dates back to the 1700s and has played a key role in human infrastructure. While new stronger metals—like titanium—have since developed, steel is the most cost-effective option for building products, and it remains in high demand worldwide [for more gold news and analysis subscribe to our free newsletter].
As many individual investors have taken a cue from professional and institutional money managers, alternative investments have gone mainstream – and commodities lead the trend. Interest in this asset class has exploded as individual retail investors have discovered commodities’ vast benefits, like low correlation to equities and bonds, inflation-fighting capabilities and their ability to profit from some of the world’s fastest-growing emerging markets. These benefits have made funds like the PowerShares DB Commodity Index Tracking Fund (DBC) popular holdings in many portfolios [for more commodity news and analysis subscribe to our free newsletter].
Although the geographical size of China is perhaps not that difficult for North Americans to appreciate, their population is another matter. As China has become the second-largest economy in the world, it is without question transformed into an enormous force in the world’s commodity markets; so much so, in fact, that the recent commodity supercycle is now generally seen as a byproduct of China’s emergence [for more commodity news and analysis subscribe to our free newsletter].
One of the wealthiest countries in the world, and the richest in Asia in GDP per capita terms, Australia is an unusual mix of a modern market economy with a large commodities-driven export infrastructure. Despite the influx of wealth created by its natural resources, Australia has never been particularly successful in developing a large manufacturing base. What’s more, the country has run large and persistent current account deficits for over a half-century. Nevertheless, Australia has very significant and efficient mining and agricultural sectors, and ranks highly in the world in many categories [for more commodity news and analysis subscribe to our free newsletter].
South Africa is the largest economy of Africa, and it accounts for almost one-quarter of the continent’s GDP. The path to this status has not been an easy one, however, as the country languished under sanctions in the 1980s tied to the government’s apartheid policies. While South Africa has a relatively well-developed manufacturing sector by the standards of African economies (and developing economies in general), a meaningful percentage of the country’s economy still revolves around commodities [for more commodity news and analysis subscribe to our free newsletter].