by Dan Norcini
There seems to be some early signs of a potential shift in sentiment regarding the impact of a potential Fed rate hike. Note – there sure are a lot of “potential’s” in here.
By that I mean that I am picking up some signals that whereas only just recently, a rate hike by the Fed was being viewed as negative for commodity prices due to the impact on the US Dollar ( higher rates = higher Dollar = broad based commodity selling), there are some signs that a rate hike is a sign of confidence in the strength of the US economy. That is leading to higher equity markets and stronger commodity prices ( in general).
It is way too early to say this with certainty but I am watching to see if this new theme begins to grow in in intensity. The markets are constantly shifting and morphing from one theme to the next, especially in this volatile environment for one reason – no one is sure of anything these days and there is no consensus alongside of a lack of conviction.