Trends Watch: February 8, 2018

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks to David Zelinski, Trader, Opus Futures.

What is your outlook for alternative investments and more specifically, CTAs?

Well, I’m only comfortable speaking for my tiny slice of the alternative investment world, agricultural commodity futures.  Agricultural commodity markets have been stuck in a years-long bear market driven by record global production in almost every crop.  The combination of favorable weather and better farming practices in the low-price environment has led to rapid increases in global supplies in the past few years.  However, more recently we are noticing that global demand has finally caught up with supplies and despite additional record production totals, global inventories are no longer expanding.  With demand at such high levels, the world now has pressure to produce massive crops in every single crop cycle.  Demand growth could easily begin to exceed production growth soon, potentially opening the door for an end to the bear-market doldrums we’ve experienced over the past five years or so.

What is your outlook for the economy?

The global economy appears to be on very solid footing, as evidenced by the abundance of favorable economic data prints seemingly coming from every corner of the globe.  We obviously need to keep a close eye on Central Bank actions over the coming months as policy missteps could spark some volatility.  Additionally, politics will likely remain a focus of markets not only in the U.S. but around the world.  In absence of any significant shocks in either of those two areas, however, I would expect economic growth to continue marching along.

What keeps you up at night?

Not much.  This business becomes a bit easier when you accept there is an abundance of things outside of your control.