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Emerging Money Daily Audio Call Preview July 9 – on the call today we waited for the Fed and ECB to chiming in order to evaluate risk assets and tell you where we think today’s comments take emerging markets.
Copper has bounced small today after a -8% pullback in last three days largely due to China credit fears and the impact this will have on inventory used as collateral for loans. The other side of this story is that copper supply dynamics are also getting worse. Copper production in the 4Q was +12% y/y and there is fear this could go higher.
BHP Billiton is the grand-daddy of the miners: largest, best balance sheet, and most diversified. Last night they reported earnings that beat by 12% and added a handful of goodies that investors are applauding in the stock price this AM, and may read through to the entire beleaguered sector.
Just remember, when the fed hikes the S&P 500 (SPX, quote) will go up! If we are in a place where the fed begins to hike rates, albeit this is different formally than removing stimulus than the economy is on better footing, commodities are rallying and they are just as worried about inflation as they are growth.
With Aussie dollar hitting 11 month lows and price barreling towards 1 year lows of .9602 set last June. This is your target to re-load the gun after taking profits.
Last night’s macro in a word is terrible. China PMI and German manufacturing offer no relief for commodities and they are linked.
My top ten reasons to be scared:
Last night China began the National Peoples Congress meetings (NPC) China makes it clear that they are targeting both growth and inflation and will tinker where they need to but the operative word is tinker.
