Wednesday, November 17, 2010

JPMorgan (NYSE:JPM) on Possible China Interest Rate Increase

JPMorgan (NYSE:JPM) said recently if China does in fact increase their interest rate it would cause an immediate drop in oil prices.

But the financial giant said it should be considered a buying opportunity for the long term, although in the short term the drop in price could be dramatic.

This is something anyone investing in commodities in general should keep in mind as well.

Many raw materials and metals will probably experience significant downward pressure almost right away, but once the smoke clears, China is still going to acquire many commodities to fuel its growth, even if they attempt to slow it down some.

For most commodities, including gold, it should be considered a buying opportunity if and when it happens.

JPMorgan said, “We continue to emphasize that any price drop in crude, similar to Friday’s, is an opportunity to buy.” Extend that to most commodities and many investors should find good entry or re-entry points.

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