Stock bulls find validation in reflation signals across commodity markets

Progress toward vaccines and easing US political uncertainty helped lift an MSCI index of world stocks to its best month ever in November while driving down the dollar

Equity bulls who expect a global economic recovery to prolong the record-breaking rally in stocks can take some comfort from signals in commodity markets. Copper, iron ore and aluminum futures are around multi-year highs and the Bloomberg Commodity Spot Index is close to its strongest since 2014 after rising from pandemic lows. For optimists that signals an Asia-led worldwide rebound — soon be aided by the rollout of vaccines against the pandemic — can help global stocks extend an 11 per cent advance so far in 2020.

“The commodities rally is the reflation trade, which has kicked in very strongly” amid