A commodity check/And other interesting things

On the heels of the 50 bps cut from the Fed, the China fiscal and monetary steps and a reminder that war is inflationary, the 2 yr inflation breakeven yesterday was up 5 bps to 1.81% and is now up from a September low of 1.47% and vs 1.68% the day before the Fed meeting. This is still well off its highs this year so nothing really of note yet but we watch to see if the trajectory continues. The 5 yr inflation breakeven closed at a 2 month high at 2.10%.

As we own fertilizer stocks, I watch corn, soybean and wheat prices closely. Corn is now trading at the highest level since late June and is up 5% since the China news. Soybeans has crept up to the highest since July and wheat is at the highest since mid June. Here too, all are well off their highs but we again watch to see if the trajectory has legs. 

On the raw material side, the CRB raw industrials index closed yesterday at the highest since late May and is just 1% from the highest since April 2023. The central bank job from here is not going to be easy as they continue to want to cut rates to cushion a slow global economy. 

The Hang Seng by the way jumped by another 6.2% overnight and is now up 32% ytd. As the market was so damn cheap prior to this rally, after the rally it's only trading at 10x 2024 earnings estimates.