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Fidelity Global Commodity Stock Fund Manager Joe Wickwire argues demand is the key factor driving commodity prices higher.
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All -- oil are both ending lower today but Joseph -- -- -- says the bulk commodities market is still kicking.
-- is manager Fidel is global commodities stock fund is flexible portfolio he's joining me on a box visits was -- -- Boston.
-- is say that because if we can't continue to see a stronger dollar specially.
Considering what we're -- vs the Euro that would be a bear market for commodity is why -- -- -- -- Yeah I would disagree I think the the commodity story is not.
Contingent on the dollar Euro.
It's really -- on the demand for commodities and the emerging markets around the world where you have two thirds of the world's poppy.
Population who are really still in the early stages of building out modern economies.
And they have needs based economies vs our wants based.
So I think in the short term a lot of traders really focus on dollar -- -- DXY to set -- they're short term oriented trades up.
But the commodity story is supported by -- the above average growth seen in the emerging markets around the world.
And by the supply constraints the commodity producers around the world continue to be challenged with.
So I think of those leads the market is gotten way over -- on the Chinese concerns and the.
Our thousand dollar Euro near you read my mind doesn't -- -- myself wait a minute we keep saying you know slowdown in China of these GDP numbers coming out of China -- you know.
Poor us we're growing -- 8% -- is them but at the same time.
We're so sensitive.
Economic data that comes out of there and you're saying that that that that worry is too much basically.
-- -- I it's overstates it is an overshoot.
So the commodity you know China is very important to the commodity story but it's not the only story that's an even though China's growth is slowing probably below seven or 6%.
The demand for commodities still exists and and China is not the only economy in the world which is using.
Commodities to build the modern components of an economy food fuel shelter infrastructure telecommunications and defense.
It's going on and every emerging market around the world that's where the above average growth this.
And then eventually in the G-7 economies we're gonna gets all these infrastructure projects which we so desperately need which are also.
Commodity.
Intensive and their use and again.
The key thing is everyone's focused on demand but no one's asking the question about supply and across the commodity spectrum supply continues to be quite -- challenge because of declining grades.
Input cost.
And political and regulatory infringement on the producer so.
The commodity producers are -- attractively priced right now because the markets have clearly overshot.
In my opinion the risk.
Can I get to that -- names out there but finally go because if you I was looking at that the commodity fund other you have the top ten holdings and has names that we know that our viewers know in the mail and a look at these stocks -- -- -- -- -- -- -- We've got rolled out shells of their Chevron Maria had -- so let's -- I mean these are you know Peabody Anadarko mean these are big American companies -- these are your top holdings.
So Leslie you're telling me that your.
Behind his company's moving forward.
So they I can't -- comment on specific companies but the global commodities stock fund is a globally diversified portfolio of agriculture energy and metal and mining companies.
The commodity producers and they even a globalize world.
Globalization really means deflation and a deflationary world.
Up pricing power is one of the scarce as commodities of all and because you're in a bull market.
Despite what some people might say on the the China angst issue.
You're -- of detail -- for commodities right now in the commodity producers have a high degree.
Of pricing power.
The generating cash flows that are significantly.
Greater than what they stock prices would imply and they're -- so -- and a low to negative year old yield world.
They're also generating dividends which help investors.
Address their income needs to act.
-- seabright generally wanted to get those names out for our viewers like -- put them up or even -- you're good at Joseph with wire great to have you very actually take from you.
You're the manager of course of -- -- his global commodities stock fund and the select gold portfolio Joseph we shall see what happens tomorrow with a --
