Two commodities could be the best exposure to reopening global economy, trader says

It's been more than a year since the WHO declared the Covid crisis a pandemic, and the world's two largest economies are well on the road to recovery.

China, the second-largest economy, is expected to post 8.4% annualized GDP growth in 2021, according to FactSet estimates, rebounding from its slower 2.3% increase in 2020. The U.S., the biggest economy, is slated to grow 4.8% this year after its contraction last year. Both used monetary and fiscal stimulus to counter slower economic activity.

Danielle Shay, director of options at Simpler Trading, is looking to the commodities market to ride global economic growth and as protection against rising rates.

"You have governments around the world that are printing money, it's not just in the U.S., and when you look at the inflation that is going to come, especially if you look at copper and oil as well, these can be really good hedges against inflation, and they're also going to perform well in a reopening economy," Shay told CNBC's "Trading Nation" on Thursday.

Copper has risen 68% in the past 12 months, hitting a nearly 10-year high in late February. Oil has also been on a tear, up 110% in a year.

"You've got copper doing well due to the strength in industrials and as people began to travel and venture out more we will see a rising demand for oil, so I like both of those picks here," she said.

A combination of increased vaccinations and global reopenings has Steve Chiavarone, portfolio manager at Federated Hermes, bullish on domestic and international equities.  

"You've had … Asia leave the pandemic sooner, they're in recovery, that's been part of the reason that they've done so well. The U.S. is following, that has pushed rates up a little bit, but we think the pace of rate hikes from here on out are not quite as severe … and we think that Europe that's a little bit behind will eventually join the party," Chiavarone said during the same interview.

All those stock markets have rebounded well off their pandemic lows. The EZU Eurozone ETF is up 83% since last March, the S&P 500 up 79%, the MCHI China ETF up 68%, and the EWU United Kingdom ETF up 63%.

"Bottom line, this is a synchronized global recovery, not perfectly synchronized but synchronized nonetheless. We're overweight equities and we've been overweight emerging markets and we expect to continue to do so," said Chiavarone.

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