Quarterly Outlook
Equity outlook: The high cost of global fragmentation for US portfolios
Charu Chanana
Chief Investment Strategist
Head of Commodity Strategy
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Easing trade tensions was the predominant red thread through markets this past week, starting with news that US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng would meet for talks in Geneva this weekend. Market risk sentiment was further boosted by former President Trump hinting that the 145% tariffs on Chinese imports could come down immediately. Earlier in the week, the United Kingdom became the first country to reach a trade deal. Although the details have yet to be hammered out, the development raised hopes that similar agreements could be concluded with South Korea, Japan, and India. However, Commerce Secretary Howard Lutnick warned that these deals will take much longer to finalise than the UK framework. While expectations may be overly optimistic for significant developments—at least in the short term—these announcements nevertheless helped trigger a broad, albeit relatively small, weekly rebound in the USD. Global equity markets also rallied, with one spanner in the works being rising US Treasury yields, as haven demand stalled.
Following a challenging April, when tariff turbulence and economic growth concerns saw the Bloomberg Commodities Index decline by 4.8%, the index—just like other asset classes—has been finding its feet again, with early May action driving a 1.4% gain, led by pro-cyclical and growth-dependent sectors, as trade optimism gave the energy and industrial sectors a boost. Precious metals, including silver, continue to attract Chinese investors and some haven demand, as geopolitical risks persist—most recently between India and Pakistan.
Elsewhere, broad gains across industrial metals were partly scuppered by weakness in New York-traded HG copper, after the tariff premium over London collapsed to 6.5% from a recent high around 15%. The agricultural sector is seeing broad losses, with good planting weather and growing conditions in the United States adding downward pressure on corn and wheat. USD beef prices hit fresh record highs on tight supply, while sugar bounced from a long-held area of support.
On an individual level, losses were led by corn, coffee, and copper, with gains at the other end being led by European and US natural gas, crude oil, and gasoline. Gold, despite suffering a setback after failing to gain a foothold above USD 3,400, was nevertheless heading for its highest weekly close on record.
Highlighted articles from the past week with links found below:
Recent commodity articles:
8 May 2025: Copper market navigates tariff uncertainty amid tight global supply
7 May 2025: Agriculture markets diverge as trade war weather and speculators reshape landscape
6 May 2025: Crude climbs as market digests OPEC hike and shale slowdown risks
6 May 2025: Gold rises as Chinese demand rebounds post-holiday
5 May 2025: COT Report: Dollar-selling persists; Crude length trimmed ahead of OPEC output hike
1 May 2025: Gold corrects sharply from record highs as Chinese demand pauses
29 April 2025: Copper navigates energy transition supply shocks and market turmoil
28 April 2025: COT Report: Continued gold selling; USD weakness drives record JPY long
25 April 2025: Commodities weekly Energy slump overshadows strength in gold and agriculture
23 April 2025: Blowout top leaves Gold in consolidation mode
22 April 2025: Commodities return Why allocation matters
16 April 2025: Whats next as gold hits our USD 3300 target
15 April 2025: COT Reports show hedge funds racing to cash post-Liberation Day
11 April 2025: Commodities weekly As chaos reigns whats next for markets
10 April 2025: YouTube Interview: Gold, silver, copper, oil - prices, supply, demand in 2025
8 April 2025: Golds deleveraging pullback fails to shake supportive outlook
8 April 2025: Golds deleveraging pullback fails to shake supportive outlook
7 April 2025: COT on Forex and Commodities - April 7 2025
4 April 2025: Commodities weekly Tariff-led recession pain triggers sharp reversal
3 April 2025: Tariff-related recession fears ignite widespread commodities selloff
2 April 2025: Commodity Outlook: Commodities rally despite global uncertainty
31 Mch 2025: COT Report: Ongoing USD selling amid mixed week for commodities
26 Mch 2025: Commodities show strength in Q1, led by a select few
Podcasts that include commodities focus:
6 May 2025: Bears hang in at key levels as Palantir rides the retail whirlwind
23 April 2025: Trump going soft on tariffs versus the direction of travel.
11 April 2025: US and China are slipping into an economic war
4 April 2025: Markets melts down as recession risks go global
1 April 2025: Bracing for Liberation Day