Investors may be getting “too excited” about the attempts by central bankers to shore up economies, said Chad Morganlander, a Florham Park, New Jersey-based fund manager at Stifel Nicolaus & Co., which oversees about $115 billion of assets. “A re-acceleration of global economic growth in the coming months is a delusion.”
More than $3.6 trillion has been wiped from the value of world equity markets since March 31 as Europe’s debt crisis worsened and U.S. unemployment stayed above 8 percent. U.S. employers added fewer jobs than forecast last month and the growth in private payrolls was the weakest in 10 months, the Labor Department said July 6. French business confidence dropped to the lowest in almost three years in June, the Bank of France said yesterday.
Money managers pulled $179 million from commodity funds in the week ended July 4, said Cameron Brandt, the director of research for Cambridge, Massachusetts-based EPFR Global, which tracks money flows. Gold and precious-metals funds outflows totaled $16 million, he said.
Prospects for raw-materials markets are “problematic” because “we remain unconvinced that a meaningful solution for the problems in the euro zone will be forthcoming,” analysts at Deutsche Bank AG said in a report on July 4.
A measure of 11 U.S. farm goods showed speculators raised bullish wagers in agricultural commodities by 28 percent to 679,849 contracts, the biggest gain since January. Hedge funds boosted bets on higher corn prices by 60 percent to 173,183 contracts, the most since April 10.
As of July 3, about 25 percent of the Midwest was in “severe” drought, according to the U.S. Drought Monitor. The condition of the U.S. corn crop, the world’s biggest, declined for a fifth consecutive week, the government said yesterday, citing data through July 8.