Skip to comments.Gary Shilling: Two Things Make Copper A More Reliable Economic Indicator Than Oil
Posted on 05/26/2012 1:16:01 PM PDT by blam
Gary Shilling: 2 Things Make Copper A More Reliable Economic Indicator Than Oil
May 26, 2012
There are two commodities that are watched particularly closely for their abilities to predict the direction of the global economy: copper and oil.
Economist Gary Shilling is bearish on both.
Shilling recently invited Business Insider to his home where he explained to us, among other things, why copper is a more reliable economic indicator than oil.
In this segment, he explains. He also explains why he thinks China's economy is headed toward a hard landing.
(Click to the site to see a video by Shilling)
(Excerpt) Read more at businessinsider.com ...
Yes, higher demand probably means more construction (electrical wiring and plumbing piping)
Stock-Markets / Stock Markets 2012
May 26, 2012 - 05:18 AM
By: Donald W Dony
Following the May 9th Market Minute titled "Downward trend starts", global markets are continuing to rollover. Copper, often referred to as a bellwether indicator on the broader economy, is also declining. The peak in copper prices was in early 2011 and it has dropped steadily over the past year.
The Dow Jones World Stock Index is closely following the trend of the red metal. Global markets have also crested in the first half of 2011.
Copper prices are forming a multi-year reversal pattern. This Head-and-Shoulders formation suggests that the metal will move below $3.25 in Q3 and eventually reach a downside target of $2.25.
Bottom line: Copper prices still need to decline below $3.25 before the reversal pattern is complete. Nevertheless, the probability of lower numbers over the summer is high. Given that metal prices have already dropped over a dollar in the last year, this reflection on the world economy implies slower growth in the months ahead.
It means more of a lot of things. Basically whatever carries electricity, like stoves and washing machines, too.
That’s good news. For me, it means more shares roll over into my FCX DRIP.
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