Commodities and U.S. confidence
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)