Carlsquare/Vontobel weekly trading note: Lower rates and orange juice opportunity
Prenumeration
This week's case is orange juice, where we see an opportunity for a short-term rally in commodity futures. The rally in US markets continues, fueled by falling interest rates over the last five trading days. In our view, there is still a gap to close between the OMX and the DAX.
Orange juice, or more specifically FCOJ, has seen a surge in interest and speculation due to its rapidly rising price. Since January 2022, the CFD price has risen from just under USD 150/Lb to over 360/Lb. Looking at FCOJ, variables namely disease and weather, have had a major impact. Without a sudden improvement in weather conditions, there is not an exhaustive list of triggers that could push prices down in the short term. Looking at the momentum in the futures market, it is possible that prices could rally back towards $400/lb.
Summing up the S&P500 earnings season, the three best sectors in terms of positive EPS surprises were Consumer Discretionary, Energy and Industrials.
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