Chart of the Day - Friday, October 1st, 2021

Commodities have outperformed Stocks over the last 18 months. The last time we saw that happen was back in 2010-2011... pic.twitter.com/XYBHOzeaQo

— Charlie Bilello (@charliebilello) October 1, 2021

Today’s Chart of the Day was shared by Charlie Bilello (@charliebilello). It's a ratio chart of Commodities vs. Stocks over the past 20-years (CRB Index vs. S&P 500). As a reminder, when the ratio is rising, it means Commodities are outperforming Stocks and vice versa. Stocks are enjoying an above-average year, with very little downside volatility, however, the real alpha has been in Commodities. The CRB index, which consists of 19 major Commodities is up more than 37% YTD, while the S&P 500 is up about 18%. Charlie points out that it has been a decade since we've seen Commodities outperform Stocks on a trailing 18-month basis. Ironically, this ratio bottomed out right after Crude Oil went negative in April 2020. This trend of outperformance could easily continue as investors' performance chase this abandoned asset class.