Is The Commodity Goose Cooked? | Nucleus Investment Insights

In November, China issued a sweeping directive to rescue its property sector. At face value, it was a major recalibration of its property crackdown.


There are two ways to read the string of announcements:

  • China is starting down the “whatever it takes” path. The current policies may not be enough, but they are a sign that China will keep adding more stimulus until the problem is fixed.
  • The plan does not change the fundamental demand for new construction. For the most part, you can categorise the elements as either (a) directives to various banks to lend more to developers, mostly focussed on completing existing projects (b) reduced debt constraints or rules on individuals buying houses. The plan is to avert catastrophe rather than return to the old normal.
  • The stock market/commodity traders assumed the first was true. We suspected the second.

    Nothing is more important in commodity markets than getting this call right. 

    In this investment podcast, Nucleus Wealth Chief Investment Officer, Damien Klassen, Chief Strategist, David Llewellyn-Smith and Senior Financial Adviser, Samuel Kerr look deeper.


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