Line chart comparing the current bull super cycle with two previous bull super cycles.
Y-axis: Index value (indexes to 100 at start of bull super cycle); X-axis: Calendar days since start of bull super cycle, zero to 3,333.
Bull super cycles shown:
All three super cycles follow roughly the same trend for the first 745 days, rising from 100 to 210 (current cycle) the 1999 cycle beginning to underperform at 141, and the 1971 cycle at 195.
By 680 days the two historical cycles had differentiated considerably, with the 1971 cycle at over 227 and the 1999 cycle at 150. The current cycle roughly paralleled the 1971 cycle, above 178.
The 1971 cycle continued to lead for some time, with peaks at roughly 875 days (247), 1,031 days (238), 1132 days (also 238), and 1,421 days (230). The current cycle, at 834 days, was at 198, when the 1971 cycle was at about 220 and the 1999 cycle was at about 125.
By 1,642 days, however, the two historical cycles began to index similarly, indexing between 195 and 240 until 2,156 days, when the 1999 cycle outperformed. By 2,640 days, the cycle indexes met again around 235 and tracked similarly until roughly 3100, when the 1971 cycle fell to 269 and the 1999 cycle was at 310. By 3,285 days (the last data point for comparison of the two cycles) the 1999 cycle continued to lead at 392 while the 1971 cycle was near 331.
Sources: Bloomberg and Wells Fargo Investment Institute. Daily data. 2020–current bull super cycle uses Bloomberg Commodity Index from March 18, 2020 to June 30, 2022. 1999–2008 bull super cycle uses Bloomberg Commodity Index from July 13, 1999 to July 2, 2008. 1971–1980 bull super cycle uses Reuters Continuous Commodity Index from October 4, 1971 to November 20, 1980. Super cycle = If you look at commodity prices over the very long term (hundreds of years), it becomes evident that they tend to move in overall bull and bear cycles, some lasting decades. These are super cycles. The Reuters Continuous Commodity Index is an equal-weighted geometric average of commodity price levels relative to the base year average price. The Bloomberg Commodity Index is calculated on an excess return basis and reflects commodity futures price movements. The index rebalances annually, weighted two-thirds by trading volume and one-third by world production, and weight-caps are applied at the commodity, sector, and group level for diversification. An index is unmanaged and not available for direct investment. Past performance is no guarantee of future results. Investing in commodities is not suitable for all investors. The commodities markets are considered speculative, carry substantial risks, and have experienced periods of extreme volatility.
Super cycle = If you look at commodity prices over the very long term (hundreds of years), it becomes evident that they tend to move in overall bull and bear cycles, some lasting decades. These are super cycles.
- Since 2020’s low, commodity prices have been on an incredible run. If we are correct that a new bull super cycle has begun, history suggests that there could be even more gains to come.
- Keep in mind that past bull super cycles have not been straight up. We expect to see dips, lulls, and pauses in commodity prices during the bull.