(0:45) - How To Trade Commodities (6:30) - Whats The Best Way To Position Yourself For Commodity Trading (12:00) - Why Is Palladium On A Hot Streak? (16:15) - 2020 Outlook For The Energy Sector (20:05) - Navigating The Upcoming Agriculture Season (29:10) - Episode Roundup: UGLD, CPER, UWT, FCX, X, AA, CMG, PALL Podcast@Zacks.com
Welcome to Episode #212 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is joined by Zacks Equity Strategist and Editor of the
Counterstrike and Commodity Innovators newsletters, Jeremy Mullin, to discuss how you can trade and invest in commodities both for the short-term and the long haul.
After the Phase 1 trade deal between China and the US was signed, it seemed like trade tensions were going to ratchet down a notch which would mean good things for the global economy.
Both China and the US were seen as being on the rebound heading into 2020.
The Coronavirus Upends the Global Economy
But then the coronavirus struck, and it has thrown previous assumptions in disarray. China will certainly see a slowdown in its economy.
It’s already being reflected in the industrial commodities as copper, for instance, fell 12 straight trading days, which was the longest consecutive decline in over 40 years.
Crude also hit new 52-week lows with WTI testing the important $50 level. If it breaks lower, Jeremy sees it going as low as $28 a barrel.
How do you play crude here?
Some Commodities are Red Hot
But not all commodities are near 52-week lows, like crude. Others have been hot investments, including Palladium.
Palladium is up 18% in just 2020 alone and soared 69% over the last year.
How can an investor get in on that?
Aberdeen Standard Physical Palladium Shares ETF which trades with average daily volume of 53,000. PALL
How much longer will it stay red hot?
Different Ways to Play Commodities
1. The short-term play is to simply trade the leveraged ETFs such as the
VelocityShares 3x Long Gold ETN Gold has been on the move again in 2020, due to uncertainties about the coronavirus. These ETFs are designed to be held for short periods as a play on the metal. UGLD.
2. The middle-term play is to buy stocks in industries that have a commodities impact. Instead of buying the
Copper ETF , you can buy a copper miner such as CPER Freeport McMoran ( and hold it for 3 to 6 months, as a way to play the trend. FCX Quick Quote FCX - Free Report)
3. The long-term play is to hold onto some stocks until the trend really turns.
US Steel , for example, is in a downward trend right now, as its earnings estimates continue to get cut by Wall Street analysts. It’s unlikely to turn around in the near-term. X
What else should you know about commodities in 2020?
Listen to this week’s podcast to find out.
5 Stocks Set to DoubleEach was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >>