Rudi’s View: USD & Energy August Report Card

Always an independent thinker, Rudi has not shied away from making big out-of-consensus predictions that proved accurate later on. When Rio Tinto shares surged above $120 he wrote investors should sell. In mid-2008 he warned investors not to hold on to equities in oil producers. In August 2008 he predicted the largest sell-off in commodities stocks was about to follow. In 2009 he suggested Australian banks were an excellent buy. Between 2011 and 2015 Rudi consistently maintained investors were better off avoiding exposure to commodities and to commodities stocks. Post GFC, he dedicated his research to finding All-Weather Performers. See also "All-Weather Performers" on this website, as well as the Special Reports section.

Rudi's View | Aug 31 2017

This is part two of this week's Weekly Insights (part one was published on Monday and Wednesday respectively in email and on the website):

-CBA And The Premium Gone
-September S&P Index Rebalancing
-Rudi On BoardRoomRadio
-Investing: The USD Did It!
-Energy Sector - August Report Card
-Rudi On BoardRoomRadio (the updated version)

-2016 - L'Année Extraordinaire
-All-Weather Model Portfolio
-Rudi On TV
-Rudi On Tour

[Note the non-highlighted items appeared in part one only]

Investing: The USD Did It!

Market sentiment and capital flows are increasingly being reflected in FX markets, which then flows onto equities worldwide. Just think about how the persistently stronger-for-longer Aussie dollar has been holding back share prices for international players such as Aristocrat Leisure ((ALL)) and CSL ((CSL)) in the Australian stock market.

Equally, there is more than a fair argument to be made that at least part of the refound popularity for base metals has occurred on the back of relentless downward pressure on the greenback.

Here's where the chart below from Morgan Stanley analysts gets extra-interesting as the lower USD impact post June has predominantly flowed into base metals, or so it appears, not so much into oil, or even gold.

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