Market Overview

Michael Novogratz Says He’s Getting Short Commodities

Michael Novogratz, Principal over at Fortress Investments (NYSE: FIG), a publicly traded hedge fund, was just interviewed by David Faber on CNBC. He expressed skepticism in the recent market run and suggested that they are slowly rotating their book toward the short side, especially in commodities.

Novogratz said that Asia is slowing, which will, more or less, set off a chain reaction through the global markets. This will put pressure on commodities, commodity stocks, and commodity rich currencies, he said.

He remarked that Asian indexes aren’t trading near lows by coincidence. “It’s telling us something,” Novogratz remarked.

Individuals can play this by getting short and/or purchasing puts in several ETFs. Examples would include:

•ISHARES FTSE XNHUA INDEX (NYSE: FXI), which tracks the top 25 Chinese companies
•POWERSHARES DB BASE METALS ETF (NYSE: DBB), which tracks base metals commodities
•UNITED STATES OIL FUND (NYSE: USO), which tracks oil futures
•CURRENCYSHARES CANADIAN DOLLAR ETF (NYSE: FXC), which tracks the Canadian Dollar, a commodity rich currency
•POWERSHARES DB SELECT AGRICULTURE ETF (NYSE: DBA), which tracks commodities such as corn, soy beans, wheat, and sugar

Posted-In: CNBC Sector ETFs Short Ideas Specialty ETFs Hedge Funds Emerging Market ETFs Currency ETFs Trading Ideas


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