Which metals and rare earth companies are set to strike in this volatile market? Tom Szabo doles out tips in this Metals Report interview and explains why he likes companies that have yet to achieve market favor.
As "the only metal with a Ph.D. in economics” because of its widespread use in industrial applications copper is an excellent bellwether for the state of global economic activity. And right now copper is predicting a major global rebound.
It was just about a year ago when the S&P was sitting at fresh highs and everyone was rather upbeat. It was a nice summer, the markets were calm, and there was a sense of optimism. Then, in the matter of a few days, things got real ugly, quickly.
The data and charts reflect China’s 36% of world consumption and its dominance of global copper markets. It is apparent to me that as goes China, so goes Dr. Copper. I take the contrarian view that a hard landing is not going to happen anytime soon.
Copper has been leading the downside charge for all risk assets since it peaked on Feb. 10. After looking at the latest trade data for the red metal, it is clear that it has a lot more bleeding to do. This does not bode well for risk assets anywhere.
It is often stated that copper is the metal with a Ph.D. in economics, and the data for the most part bears this out. The breakdown in the price structure of the Bullish Consensus for copper strongly suggests lower prices for copper, which in all likelihood implies a recession.