By Frank Tang
Reuters Quote: Gold's 'death cross' signals more losses coming
By Frank Tang
(Reuters) – Stock index futures pointed to a lower open on Wednesday, indicating a drop from record highs at the open as investors continued to question the longevity of the Federal Reserve’s stimulus program.
Supportive monetary policies from central banks around the world have lifted equity markets this year, with the S&P 500 up more than 16 percent. On Tuesday, stocks soared and the Dow closed at another record high after the Bank of Japan and European Central Bank reassured investors that policies designed to boost economic growth would stay in place.
Last week, indexes fell on concerns that the program may be scaled back sooner than expected, and strong economic data on Tuesday stirred speculation that the Fed may begin tapering off its program soon. The concerns sent U.S. Treasury debt yields to their highest levels in over a year and pulled equities back from session highs.
“(Tuesday) was the first time we saw rates spike on concerns about the Fed tapering, and if that spreads, it will have negative ramifications for the rest of the market,” said Adam Sarhan, chief executive of Sarhan Capital in New York.
While strong corporate earnings have also contributed to the equity market’s surge in 2013, central bank stimulus has pushed investors to add to positions on market declines, limiting extended selloffs. So, any change to the stimulus program may prompt a round of profit taking.
“There’s still a question about how much we can grow without stimulus, and what will happen to the market when rates go up,” Sarhan said.
S&P 500 futures fell 9 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures slipped 75 points and Nasdaq 100 futures fell 13.5 points.
Cyclical companies, closely tied to the pace of economic growth, have been volatile on uncertainty over the Fed’s stimulus measures. Bank of America (BAC.N) fell 0.8 percent to $13.24 in premarket trading while JPMorgan Chase & Co (JPM.N) was off 1 percent at $54.05.
In company news, Smithfield Foods (SFD.N) surged 25 percent to $32.55 in premarket trading after China’s Shuanghui Group agreed to buy the company for $34 a share.
Trina Solar Ltd (TSL.N) slumped 10 percent to $6.10 in premarket trading after the company reported its seventh straight quarterly loss.
Apple Inc (AAPL.O) Chief Executive Tim Cook said late Wednesday he expected the tech giant to release “several more game changers,” hinting that wearable computers could be among them.
(Editing by Bernadette Baum and Nick Zieminski)
http://www.reuters.com/article/2013/05/29/us-markets-stocks-idUSBRE94R0DB20130529
Thu Oct 20, 2011 2:55pm EDT
* Copper leads commods rout with 6.6 pct decline
* Zinc, lead, aluminum hit lowest in more than one year
* EU summit will not reach EFSF decision – sources
* Coming up: Weekly Shanghai metals inventory data Fri.
By Chris Kelly and Silvia Antonioli
NEW YORK/LONDON, Oct 20 (Reuters) – Copper prices tumbled nearly 7 percent on Thursday, the biggest one-day collapse in four weeks, on fears of a double-dip recession and growing doubts that Europe will get a handle on its debt crisis. Metals, often seen as a proxy for underlying economic conditions due to their wide use in industry, were hit hard by the specter of a global slowdown with lead, zinc and aluminum all hitting their lowest level in more than a year.
Taking its directional cues from Asia, where prices fell the 6-cent daily limit, copper’s decline far outstripped losses in other commodities, bucking its bullish supply situation, where the world’s second-largest copper mine is running at about two-thirds of its capacity after a month-long strike. Other risky assets like oil and agricultural commodities went down between one and two percent.
“Copper tends to lead other markets. If copper prices are starting to begin another leg lower now — nearly 10 percent in just two days — that’s not just a blip on the radar … it is indicative of investors’ concern about the global economy,” said Adam Sarhan, chief executive of New York-based Sarhan Capital.
“Copper right now is signaling that the global economy might be in for a double dip.”
London Metal Exchange (LME) benchmark copper dived $475 or 6.6 percent to finish at $6,735 per tonne, its biggest daily decline since Sept 22, when it plunged over 7.5 percent.
In New York, the key December COMEX contract dropped 20.05 cents or 6.2 percent to settle at $3.0575, close to the bottom end of its $3.2350 to $3.0310 session range. Volumes perked up Thursday as the selling intensified. Close to 64,000 lots traded in New York, nearly 12 percent above the 30-day average, according to
Thomson Reuters preliminary data. Copper extended a reversal from Monday’s three-week high near $3.50 in New York and $7,660 in London, leaving both markets vulnerable for a retest of their 2011 lows, at $2.99 and $6,635, respectively.
“People are saying these metals are not trading on the fundamentals, they are trading on the macro, but there is nothing more fundamental in the worldthan the economic outlook,” analyst Stephen Briggs of BNP Paribas said. “The bank’s (BNP Paribas) view is that Europe will muddle through and find a solution, but clearly the market is worried that that might not be the case,” he added.
A high-profile EU summit will go ahead on Sunday as planned, according to sources in Germany’s ruling coalition, but it will not reach a decision on leveraging the euro zone rescue fund, the European Financial Stability Facility(EFSF). Sentiment briefly improved after the Federal Reserve Bank of Philadelphia said its index of business conditions in the U.S. Mid-Atlantic region rose in
October. WARY CUSTOMERS
BHP Billiton , the world’s largest miner, in the face of short-term market volatility warned on Thursday of increasingly wary customers, although it said its order books were full due to resilient Chinese demand.”We are also seeing that customers are looking closely at their inventory levels as they operate their businesses, cognizant of the potential need totailor their plans if the global economic uncertainty continues,” Chief Executive Marius Kloppers said in London. Customer buying interest remained strong, he said, fueled by China, where domestic stockpiles have been “substantially liquidated.”China is the world’s largest copper consumer, accounting for roughly 40 percent of global demand of refined metal. Monthly imports of copper products rose to a 16-month high in September.
Metal Prices at 1816 GMT
COMEX copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2010 Ytd Pct
move
COMEX Cu 306.35 -19.45 -5.97 444.70 -31.11
LME Alum 2085.00 -97.00 -4.45 2470.00 -15.59
LME Cu 6730.00 -480.00 -6.66 9600.00 -29.90
LME Lead 1789.00 -81.00 -4.33 2550.00 -29.84
LME Nickel 18000.00 -800.00 -4.26 24750.00 -27.27
LME Tin 21200.00 -725.00 -3.31 26900.00 -21.19
LME Zinc 1740.00 -98.00 -5.33 2454.00 -29.10
SHFE Alu 16040.00 -345.00 -2.11 16840.00 -4.75
SHFE Cu* 50950.00 -2940.00 -5.46 71850.00 -29.09
SHFE Zin 13850.00 -740.00 -5.07 19475.00 -28.88
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
http://www.reuters.com/article/2011/10/20/markets-metals-idUSL5E7LK2EE20111020
Wed Mar 30, 2011 3:20pm EDT
* Copper sinks as Chinese demand worries mount
* Copper stocks in China, LME warehouses in the spotlight
* U.S. copper runs into technical support at 100-day MA
* Coming up; Chinese manufacturing data Friday
(Recasts, updates with U.S. copper closing, adds graphic,
analyst comments and NEW YORK dateline/byline)
By Chris Kelly and Rebekah Curtis
NEW YORK/LONDON, March 30 (Reuters) – Copper prices ended
sharply lower on Wednesday, on pace for their biggest monthly
decline since June 2010, as weaker demand cues from China and
fears about a moderation in the global economic recovery kept
many bulls sidelined.
Chinese monetary tightening measures, coupled with unrest
in the Middle East, rising oil prices, euro zone debt problems
and Japan’s nuclear crisis have all combined to throw the
magnitude of the global economic recovery into question, and
with it, demand for raw materials.
As a result, copper prices have responded, falling more
than 12 percent from their mid-February peaks at $10,190 per
tonne in London and $4.6575 per lb in New York, before
recovering to stand in aimless ranges at quarter’s end.
“From a fundamental standpoint, it’s leading a lot of
people to question whether or not they want to remain long
copper going into a new quarter,” said Adam Sarhan, chief
executive of Sarhan Capital in New York.
London Metal Exchange copper for three-month delivery
CMCU3 dropped $209 to close at $9,381 a tonne, on track for a
5 percent fall in March, its first monthly decline since June
2010.
U.S. copper HGK1 followed suit, extending a downtrend in
place since mid-February before running into some technical
support near its 100-day simple moving average.
It settled down 7.25 cents at $4.2740 per lb.
Trading volumes began to perk up, with more than 47,000
lots traded by 2:24 p.m. EDT (1924 GMT). This was the first
time volume topped 47,000 lots since March 17, according to
preliminary Thomson Reuters data.
“All the bets were put on China,” said Eugen Weinberg, an
analyst at Commerzbank. “Sentiment in China is not as rosy and
not as upbeat as sentiment in Europe or the U.S.”
That being said, attention will now turn to Chinese
manufacturing data on Friday, where market participants will
see if the country’s vast manufacturing sector will recover
from the six-month low hit in February. [ID:nL3E7ET1H8]
“Are they going to maintain the growth, given that the auto
sector is in doubt and imports are trending lower,” asked Bart
Melek, vice president and director of commodities, rates
research & strategy with TD Bank Financial Group. “It’s
expected to move up by consensus a bit, but, if it’s a
disappointment, watch out.”
Despite the more cautious Chinese outlook, Jiangxi Copper
Co Ltd (0358.HK)(600362.SS), the country’s largest copper
producer, expects China’s consumption to rise by 10 percent to
12 percent this year and plans a 60 percent rise in its own
production capacity by 2015. [ID:nL3E7EU1D3]
Even data showing strong hiring by U.S. private employers
failed to give the market a boost, as investors awaited
Friday’s closely watched government report on non-farm
payrolls. [ID:nN30275708]
TRADITIONALLY STRONG QUARTER
Traders and analysts are waiting to see what will happen in
the second quarter, traditionally the strongest in terms of
demand, when China normally buys ahead of a pick-up in
construction activity in the third quarter.
“Anecdotally, something in the region of 600,000 tonnes of
refined copper currently (sits) in bonded warehouses in
Shanghai, with perhaps another 100,000 tonnes in the southern
ports,” Standard Bank said in a note.
Also in the spotlight are LME stocks of copper, which added
225 tonnes on Wednesday, bringing total warehouse levels to
439,725 tonnes, their highest since last July. <0#LME-STOCKS>
In other metals, aluminium CMAL3 came within $2 of
Tuesday’s session peak at $2,656 per tonne, its highest since
September 2008, before ending down $19 at $2,629.
Metal Prices at 3:48 p.m. EDT (1948 GMT)
COMEX copper in cents/lb, LME prices in $/T and SHFE prices in
yuan/T
Metal Last Change Pct Move End 2010 YTD Pct
move
COMEX Cu 426.85 -7.80 -1.79 444.70 -4.01
LME Alum 2629.00 -19.00 -0.72 2470.00 6.44
LME Cu 9380.00 -210.00 -2.19 9600.00 -2.29
LME Lead 2655.00 -30.00 -1.12 2550.00 4.12
LME Nickel 26025.00 -575.00 -2.16 24750.00 5.15
LME Tin 31225.00 -525.00 -1.65 26900.00 16.08
LME Zinc 2335.00 -40.00 -1.68 2454.00 -4.85
SHFE Alu 16835.00 5.00 +0.03 16840.00 -0.03
SHFE Cu* 71300.00 470.00 +0.66 71850.00 -0.77
SHFE Zin 18375.00 95.00 +0.52 19475.00 -5.65
** Benchmark month for COMEX copper
* 3rd contract month for SHFE AL, CU and ZN
SHFE ZN began trading on 26/3/07
(Additional reporting by Pratima Desai in London; Editing by
Walter Bagley)