Commodities expert warns economic slowdown could hit markets in 2026

• Over 20% of global financial assets remain in cash as investors shift toward safe-haven commodities like gold, silver, and industrial metals amid economic uncertainty
• U.S. labor market shows significant weakness with initial jobless claims at 231,000 (vs. 212,000 expected) and job openings falling to 6.5 million (vs. 7.1 million expected)
• The Federal Reserve faces a 'stalemate' situation with producer price inflation near 3% while unemployment rises, caught between fighting inflation and preventing recession

Summary: Economic Slowdown Warning for 2026

Key Expert Warning:

Jeff Christian, managing partner of CPM Group, warns the U.S. economy shows multiple decline signals that could trigger heightened market volatility in 2026. Speaking on February 5, he cited weakening labor markets, persistent inflation, and political uncertainty as primary concerns.

Labor Market Deterioration:

• Initial jobless claims reached 231,000 versus expectations of 212,000
• Job openings dropped to 6.5 million, significantly below the 7.1 million forecast
• Unemployment rising with increased layoffs and reduced hiring appetite among smaller companies

Market Dynamics:

Christian argues this cycle differs from typical rate-cut environments. While declining interest rates normally support equities, rate cuts driven by weak growth, poor corporate earnings, and layoffs could damage stock prices. Recent equity strength has concentrated in AI and select sectors, which he considers increasingly unstable.

Federal Reserve Stalemate:

The Fed faces a difficult position with producer price inflation near 3% (above preferred levels) while economic momentum fades, caught between fighting inflation and preventing recession.

Safe Haven Asset Shift:

Economic and political anxieties are driving investors toward alternative assets including gold, silver, and industrial metals (platinum, palladium, copper, aluminum, nickel, zinc). With over 20% of global financial assets in cash, capital is seeking alternatives to traditional stocks and bonds. ETF data shows steady institutional buying of metals throughout January.

Market Structure:

Christian noted that 90% of futures volume is now generated by algorithmic trading, causing metals to move together as automated systems respond simultaneously to macro signals.

Outlook:

Christian expects continued market turbulence, describing uncertainty as "tremendous" and spreading beyond the U.S. to global economies.