Com­modi­ties and U.S. con­fi­dence

Financial Mirror (Cyprus) - - FRONT PAGE -

Last week, U.S. con­sumer con­fi­dence, as mea­sured by the Con­fer­ence Board, was at a multi-year high. Not that we needed it, but June’s fi­nal read­ing for the Michi­gan Sen­ti­ment In­dex score un­der­scores just how good the typ­i­cal con­sumer is feel­ing now. The third and fi­nal read­ing of the Michi­gan Sen­ti­ment score for this month rolled in at 82.5... bet­ter than the ex­pected 81.7, and higher than the sec­ond score of 81.2. It’s not a multi-year high read­ing, but it’s a multi-month high, and it’s clear op­ti­mism continues to grow.

Bet­ter con­fi­dence won’t stave off any short-term pull­back from the mar­ket. The cor­re­la­tion be­tween con­fi­dence and the long-term mar­ket trend, how­ever, is pretty high. Also, last week, we ex­plained our bullish out­look on cop­per and alu­minum. Al­though we liked both for the fore­see­able fu­ture, we pre­ferred cop­per over alu­minum if there was only room for one in your port­fo­lio. So how have things pro­gressed in the mean­time? Pretty well. Alu­minum has ad­vanced a cou­ple cents per pound, and is knock­ing on the door of a ma­jor break above $0.85.

Cop­per has been even bet­ter. It’s up from about $3.05 per pound then to $3.15 now, and seems to have picked up steam. Best of all, there’s still plenty of room to keep run­ning. And nei­ther cop­per nor alu­minum are any­where near their cycli­cal highs. (Source: Small­Cap Net­work)

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