A global recession could be coming - at least that's what commodity prices seem to say

Happy Friday eve to the smartest corner of the internet. Phil Rosen here, writing to you from New York City. 

This week I've seen commentators draw comparisons between the current boom in artificial intelligence stocks and that of meme stocks two years ago. 

But veteran market-watchers told me that beyond general budding enthusiasm, the two trends couldn't be less alike. The fundamentals driving each surge are just about from different planets.

Here's the takeaway: When it comes to AI names, investors won't have to rely on goodwill from the Reddit crowd this time around.

But we've got meaner beasts to tackle today — starting with a global recession.

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1. Like most economic discussions, risks of catastrophe vary depending on who you ask. That's where quantitative indicators can prove helpful. 

Right now, the chief economist at the Institute of International Finance, Robin Brooks, is watching weakening commodity prices. 

Specifically, Brooks pointed out that oil and copper prices have slumped roughly 6% each since mid-January, despite China's easing of zero-COVID policies.

"Whatever is going on in China, there's no sign that the end of zero-COVID is boosting global growth, based on commodity prices," Brooks said in a tweet. "Oil prices never went up and copper prices are falling after the initial China reopening excitement fades."

And he closed with a brief but powerful warning: 

"Global recession is coming."

Craig Erlam, an analyst at OANDA, told my colleague in London, Zahra Tayeb, that the oil and copper declines suggest lingering anxiety about economic risks, and that markets could be factoring in slower growth elsewhere.

But then again, that weakness could also be a reflection of higher interest rates around the world resulting in reduced liquidity in the financial system. 

"No shadow of a doubt, there is no depth to markets (bid offer spreads widening, and depth and number/size of market bids/offers below current prices)," Marc Ostwald of ADM Investor Services told Insider. 

He pointed to the sharp change in oil prices last week as an example of shallower liquidity. 

To him it comes down to a financial problem, not a problem of supply.

"As witnessed in oil prices round trip on Friday, if there was liquidity, the market does not do round trips like that — the same thing applies to copper and Treasuries," Ostwald said. 

How has your investing strategy changed as recession calls heat up? Tweet me (@philrosenn) or email me (prosen@insider.com) to let me know. 

In other news:

2. US stock futures rise early Thursday, following a number of better-than-expected earnings reports. Meanwhile, investors are watching for the latest data on weekly unemployment claims, due out at 8:30 a.m. ET. Here are the latest market moves.

3. On the docket: PepsiCo, L'Oréal, and Toyota, all reporting.

4. The AI craze has sent some stocks soaring up to 300%. One expert predicted that apps like ChatGPT could accelerate investor returns in the coming years. The sector's top fund managers shared the best 74 stocks to capitalize on the trend.

5. American drivers are using less gas as work-from-home persists. The EIA said Tuesday it expects that trend to continue, and the rise of electric vehicles will also curtail gas demand: "The heyday of gasoline is over."

6. Wharton professor Jeremy Siegel explained why he blames the Fed for inflation. In an interview with Insider, the veteran market-watcher slammed the central bank for fanning high prices, and warned that a recession could be on the way. Read his full insights. 

7. Russia's growing use of China's yuan doesn't pose a threat to the US dollar, according to a Washington DC-based think tank. If anything, that pivot could end up hurting the Russian economy. Here's why the yuan's growing overseas use isn't going to bring down the greenback.

8. Dallas, Las Vegas, and other cities made Insider's list of best markets for homebuyers in 2023. Housing prices continue to slide in the new year, and some economists have warned that a 20% decline is around the corner. See the list of 15 cities.

9. Wall Street investors are saying there's never been a better time to invest money overseas. Goldman Sachs' David Kostin said the firm's global equity forecasts point to better return potential in non-US markets. Here are the seven best opportunities right now.

10. Disney stock surged after hours Wednesday after the company announced plans for layoffs. Newly returned Bob Iger has decided to slash 7,000 jobs and reorganize the company — which investors have cheered.

Curated by Phil Rosen in New York. Feedback or tips? Tweet @philrosenn or email prosen@insider.com

Edited by Max Adams (@maxradams) in New York and Hallam Bullock (@hallam_bullock) in London.