Climbing A Wall Of Worry? February 1st, 2019 by John Gross

That’s the way it seems these days.

And a sampling of recent headlines tells us there is much to be concerned about:

China’s Slowdown Hits Growth Globally
Export Weakness Drags On Eurozone
Chances Of Recession Are Rising
President Trump Doubts Agreement Can Be Reached With Congress on Border Wall
French Employers And Others Warn On No-deal Brexit Chaos

Despite these dire warnings, equities continue rising, with the S&P 500 posting the best January in 30 years.

In the metals department, year to date nonferrous prices are up across the board; ditto precious metals, and crude oil soared almost 22%.

Further, if share prices of copper producers are our guide, the New Year is indeed off to a good start.

Freeport McMoRan is up almost 12%; BHP + 6%; Rio Tinto + 15%, and Southern Copper + 9%.

So how do we reconcile these diametrically opposed appraisals of market conditions?

Very simply, we can’t. And who says markets have to be logical and rational anyway ?

As relates to copper specifically, we see that Comex inventories fell some 22,200 mt over the past five weeks, while Shanghai stocks rose 24,000 mt.

Which market is giving us an accurate read on things ?

And to muddy the waters a bit further, no sooner does the Fed announce that it is going to put into practice the virtue of patience, then just days later, an exceptionally strong unemployment report come out. – Now What?

Like the tiny turn of a kaleidoscope, the picture changes instantly.

On another note, we are very pleased to report an exceptionally strong, and positive response for publication of The Copper Journal Price & Inventory chart, encompassing the years 1998 – 2018.

It is expected to be available before the end of February.

Regards,
John

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