The good news is: investors are still betting on a global recovery. And, cooper prices prove it.
As I’ve said before, I do not like the frothy nature of this asset bubble which, in my view, is entirely dependent on an overly aggressive Federal Reserve and Biden administration, nonetheless, if you aim to make money and hedge inflation — you still want to be invested.
Couple things to watch this week:
Copper, which is seen as a barometer of growth, surged to its highest value of the decade. It rose more than 2% in London to $9,750 a ton, the highest since 2011.
This comes as the U.S. recovery picks up and Joe Biden prepares to spend big (really big) on infrastructure. Meanwhile, an economic boom in China is also helping to give cooper and other aluminums a big lift.
This week, investors will hear from The Fed which meets tomorrow and Wednesday. Jerome Powell and company will likely maintain previous guidance and signal that the Fed will keep rates low through 2024 amid mixed signs of an economic recovery…which should provide more wind to the markets’ sails.
U.S. durable goods rose less than forecasted which, in the current environment, may provide more cover for the Fed to continue with its easy money policies.
The yield on the 10-year treasuries inched slightly higher to 1.58%.
Watch the price of Bitcoin again today. The flagship crypto currency regained some of its losses as investors reacted to an Elon Musk tweet on cryptos. He asked, “What does the future hodl?” over the weekend. It was an intentional misspelling of the world hold and refers to a popular bitcoin meme digested the news that JP Morgan will start an actively managed bitcoin fund. JP Morgan is the latest major financial player to join the crypto space.
Investors are watching earnings out of Tesla today. Q1 earnings will spotlight 2021 deliveries as the stock retreats from earlier highs. Earnings will be released after the market close on Monday.
European Travel Hopes
European stocks reversed a downward trend of 0.8% last week, as the Stoxx Europe 600 gained 0.2%.
European Commission President Ursula von der Leyen announced that fully vaccinated Americans should be able to travel to Europe over the summer, causing European travel stocks to spike. Deutsche Lufthansa gained 2.8%, International Airlines Group gained 3.5% while Rolls-Royce (also an aircraft engine manufacturer) gained 4,1%.
Oil prices are falling amid concerns that the COVID-19 crisis in India could hurt global demand. West Texas Intermediate crude declined 1.7% to $61.08 a barrel. Brent crude declined 1.8% to $64.95 a barrel.
Elsewhere, Gold strengthened 0.1% to $1,779.86 an ounce.