Asset Allocation
After several years of decline, commodity prices are bouncing back. Oil has risen above $70 per barrel, and industrial metals such as copper and aluminum have also reached multi-year highs. Although not as broadly commodity-dependent as in the past, emerging markets economies and companies could see a tailwind from these higher prices. Investors should be careful not to think of emerging markets as a homogenous basket that moves in one direction though. Brazilian miners, for example, might benefit more from such a cycle than companies in other industries. The flip side to rapidly rising commodity prices is increased inflationary pressures, a fear that unnerved markets earlier in the year.
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Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.