Insufficient heat can interrupt the welding process, but U.S. Steel’s problem has been too much of it. Fiery nationalistic and labor backlash is preventing the 123-year-old company from fusing with Japanese peer Nippon Steel, as leery U.S. security regulators look set to nix the $15 billion deal. Although boss David Burritt may be forced to mold his metal-maker differently, there are ways to keep it relatively strong. The fight over U.S. Steel offers a microcosm of an industry-wide one. More carbon-intensive blast furnaces produce steel of better quality. And even though, say, the smooth surfaces of car panels are tougher

Darren Woods has had a surprisingly good four years. On Wednesday, Exxon Mobil’s chief executive scored a victory at the oil driller’s annual meeting, and clinched re-election. Weeks earlier he closed his takeover of rival Pioneer Natural Resources. And Exxon’s valuation has soared as oil and gas exports hit a record. All of this under a U.S. president who pledged to fight climate change. As Biden was taking office, Exxon was on shaky ground. The company’s stock price had plummeted more than 40% during Donald Trump’s presidency. Shareholders fretted over how Exxon would prosper in a world transitioning from dirty

The high rates of economic growth that China experienced between the beginning of the 21st century and the start of the pandemic have underpinned a substantial increase in its demand for commodities. Opening up trade, rapid urbanisation and industrialisation have benefited China greatly. Expansion of its manufacturing sector has imposed heavy requirements on China’s power generation network, while rural-urban migration has meant greater investment in transport and utilities infrastructure, not to mention residential construction. Demand continued to increase during and after the global financial crisis (GFC), on the back of strong government stimulus in housing and manufacturing, with this process

April 2024 was another month with healthy inflows for the European ETF industry. These inflows occurred in a further unstable market environment since the geopolitical tensions in Middle East increased over the course of the month. Especially the developments around the Red Sea may impact the economies in western countries, since a number of shipping companies these days avoid the passage of the Suez channel. It is, therefore, to be expected that the prolonged delivery times will cause some tensions for the still vulnerable delivery chains. Market sentiment was further driven by hopes that central banks—especially the U.S. Federal Reserve—have

As the world braces for a seemingly inevitable recession, commodities have taken a hit. The prices of oil, copper and iron ore are all sharply down from their peaks earlier this year. That’s not surprising, as demand for raw materials tends to move up and down with economic activity. But another factor is the capital cycle: the amount of investment entering or exiting an industry. Given the severe lack of money that has flowed into conventional energy and raw materials in recent years, it’s possible that commodities will deliver positive returns even as the economy contracts. Despite the energy crisis

The European ETF industry shows a high concentration of assets under management at the promoter level. This may lead to the assumption that assets under management must show a high concentration on the level of the fund domiciles too, since common sense would expect that the promoters of ETFs tend to launch all their ETFs in a single domicile. This assumption is not 100% true, since especially those ETF promoters with large product ranges and/or a local bank as a distribution channel are tailoring their product offerings to the needs of all stakeholders. This means the respective ETF promoters launch

Gold Fields’ long history is a present-day headache in more ways than one. The $9 billion South African bullion producer is reluctant to talk about its roots, which trace back to its founding by rapacious British imperialist Cecil Rhodes in 1887. These days the company has only one set of operations in South Africa. But Chief Executive Chris Griffith has to deal with the problem of ageing mines. That explains why he is paying up for Canadian rival Yamana Gold in a $6.7 billion deal. With the gold price riding high at $1,800 or more an ounce since the start of

It was not surprising that April 2022 was in general a negative month for the European fund industry given the geopolitical situation in Europe, the still ongoing COVID-19 pandemic, disrupted delivery chains, and the sluggish market environment. That said, the promoters of mutual funds (-€20.5 bn) faced outflows, while the promoters of ETFs (+€14.2 bn) enjoyed inflows. Within this market environment and given the economic uncertainties, one would expect that European investors sold long-term funds and bought money market products. Therefore, it is somewhat surprising that European investors are still reluctant to buy money market products on a larger scale,

U.K. equities have generally underperformed its global peers consistently over the last decade.  The FTSE All Share has experienced a compound annualized growth rate (CAGR) of 4.7% and 7.3% over the last 5 and 10 years respectively.  In comparison, the Russell 1000 CAGR over this same period is 16.5% and 14.9%, while the Datastream World Market CAGR is 11.1% and 9.9% respectively. The start of 2022 has been one of the most volatile on record which we highlight in a prior note (Data Insight: A Turbulent Start to the Year for Global Equities, January 27, 2022).  To this point, the

Commodity funds provide numerous benefits when implemented into investors’ portfolios. Three of the main benefits are portfolio diversification, inflation protection, and the return potential of the underlying commodity. This asset class tends to garner more attention as market uncertainty grows. With the International Monetary Fund (IMF) revising downward both global (-0.5 percentage points) and U.S. (-1.2 percentage points) 2022 growth projections from their October projections, it feels like a good time to touch upon commodity funds. Lipper has six classifications that make up the commodities macro-group of funds—Commodities Agriculture Funds, Commodities Base Metals Funds, Commodities Energy Funds, Commodities General Funds,

Hold tight, we’re about to embark on a commodities supercycle—like a cycle, but… more super. That, anyway, is the call from many in the market, with the highest profile proponent being Goldman Sachs, which says this is a structural bull market that could last up to 10 years, an investment cycle akin to what we saw coming out of China in the 2000s. John Authers over at Bloomberg has even blown the dust off Kondratieff Wave theory to describe the phenomenon, implying a very long run for the cycle—Kondratieff Waves run over multiple decades—bestriding numerous “normal” business cycles. He argues

Bunge is a dish best carved before serving. The U.S. crops trader has attracted the attentions of rival Archer Daniels Midland, Reuters reported on Friday, raising the idea of a $30 billion-plus combination. It sounds financially palatable. But an offer would give rivals, customers, farmers, counterbidders and numerous governments a chance to spoil the recipe. Condensing the agricultural trading market from four major players to three sounds like antitrust poison. Yet it’s not necessarily a killer. Morgan Stanley estimates the old gang of ADM, Bunge, Cargill and Louis Dreyfus have 65 percent of the market. But China’s COFCO has muscled