Edward Meir
Edward Meir
across anytime bulls heading hills shot
Yesterday's sell-off was a shot across the bow, but we don't think the bulls will be heading for the hills anytime soon.
among bulls copper rally surprised
The copper rally has surprised us all, even the die-hard bulls among us.
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As long as the prospect of sanctioning 4 million barrels per day of Iranian oil is out there, the Iranian situation, in our view, will be the front and center issue that will command market attention.
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It remains to be seen whether this latest really will be upstaged by this week's EIA inventory reports. We think not; the markets are grappling with three simultaneous geopolitical hotspots right now, increasing the odds that at least one -- if not all three -- of these situations will override the potentially bearish consequence of an inventory increase.
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The growth picture looks very solid. We're not seeing any slowdown at all in any of the major metal-consuming countries, despite higher energy prices and higher interest rates.
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The Nigerian problem, it seems, is transforming itself from a pesky, on-again, off-again, bottleneck to one with more staying power.
concluded drama explains head longer markets perhaps prolonged response
The prolonged drama probably explains why markets have not done much of anything in response to the news. Participants have perhaps concluded that things will take a lot longer to come to a head -- if they do at all.
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While fundamentals are tight in several of the metals, they cannot justify current valuations. Markets are, instead, held hostage by the growing amount of investment and speculative money out there that is increasingly finding its way into commodities.
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There are still no signs of a downturn in global economic activity, suggesting that the fundamental backdrop for most commodities, including crude, remains favorable. We'll see if this week's U.S. numbers change any of that.