From equities to Bitcoin, and now commodities. Yet oil has lagged because it’s still
driven by fundamentals. Unlike gold or copper, there’s no shortage of oil; inventories
remain healthy. Despite Brent hovering around $70, we don’t see a strong case for oil
appreciation. Price action is being supported by a weaker dollar, expected rate cuts, and
market speculation, not real consumption. Moreover, with U.S. inflation stable at 3% and
a robust economy, the Fed’s dovish stance is puzzling. Rates should be rising, not falling
so the speculative bets on commodities - without fundamental demand - may leave the
current rally short-lived.
Outlook for the US economy in H2?
Things are more positive than what the headlines suggest. Although Q2 numbers are
still pending, the U.S. economy has remained surprisingly resilient. Earlier fears of a deep
recession or a damaging trade war haven’t materialized in earnings data. Markets have
recalibrated, with valuations once discounted by 10–15% now looking reasonably priced.
Healthy corporate balance sheets and a solid labor market are providing support. Still
the upside is limited. Earnings growth has stalled, and while large-cap tech remains
strong thanks to capex and AI investment, small and mid-cap companies continue to face
refinancing risks due to high debt and elevated yields. The market appears to be rangebound
caught between the extremes of pessimism and optimism, with an uncertain
path forward.
Is tariff uncertainty adding to the fog?
Trump has shifted positions again recently, and while both China and the U.S. continue
to posture, none of the structural concerns, tariffs, debt burdens, interest rates, have
been resolved. Sentiment could sour quickly once companies begin reporting margin
compression in Q2, especially if tariffs begin to bite harder.