Ags, energy, and stock prices could see stormy weather ahead

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Ags, energy, and stock prices could see stormy weather ahead

By Blu Putnam, Chief Economist & Erik Norland, Senior Economist, CME Group

Stormy Weather for Ag, Energy Markets?

  • Agriculture, energy markets could see more weather events through 2020, 2021.
  • La Niña could generate more hurricanes than usual, potentially striking US.
  • Excessive rain, snow possible if warmer waters persist through winter, spring.
  • If La Niña pattern intensifies, flooding could delay crop seeding in 2021.
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Nasdaq-100-S&P 500 Volatility Ratio at Peak Levels

  • Cost of Nasdaq-100 options has surged relative to S&P 500 options.
  • Surge tracks sharp gains in the tech-heavy index over past three years.
  • Nasdaq-100 slumped 85% from 2000-2002 after 2,000% rally in 1995-2000.
  • Low 30-year Treasury yields make equities look inexpensive versus bonds.
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