Commodities: Developed Market Equities and Commodities Diverge; Return to Normal - Goldman Sachs

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While the equity markets are at highs, commodity prices have declined. This is a divergence from the last peak in October of 2007 (when commodities and equities both hit highs simultaneously) owing to the confluence of macroeconomic drivers.

In a note out today, Goldman Sachs ( GS ) believes that this lack of correlation is actually a return to normal. Micro-economic drivers such as rising energy supplies and an increase in metal inventories are now representing their underlying fundamentals.

Accordingly, GS is maintaining its neutral recommendation on commodities with a near term return forecast of +0.1% and a 12 month forecast of +1.6%.

GSG 31.31 -0.17 -0.54

SPX 1646.75 -1.25 -0.08



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: GS

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