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Let’s talk about copper – but not because it’s booming. Copper prices hit a two month low on Friday, trading around where they were this time in September. (On Thursday, prices had technically lost -8% WoW.) What that means: the impact of the second most recent Chinese stimulus excitement, for copper at least, has been completely wiped off the charts.
There’s a lot going on here. A stronger USD makes commodities less enticing; and we needn’t linger on China’s latest lacklustre stimulus push – god knows how many they’ve announced this year.
(To be fair, juicing the Chinese stock market ahead of Golden Week for vibes might have worked – October retail sales came in at 4.8% vs. expectations for 3.8%.)
It’s Net Zero, stupid
But there’s a bigger macro trend that some analysts have perhaps overlooked.
The underlying psychology behind the bull case for copper in 2024 has been that copper is the energy transition metal. As the world turns to decarbonisation, electrification, renewables, EVs, home and large solar, battery packs, grid upgrades – copper is behind it all.
Except now, Trump is in charge of the world’s largest economy – and Trump doesn’t really give a shit about renewable energy. Presumably he’ll keep EV concessions around that were introduced by Biden’s Inflation Reduction Act (IRA) – remember where Musk has firmly stuck his nose in recent months – but in my view, there’ll be a lot of cuts.
Trump also told Joe Rogan offshore wind turbines give whales psychiatric problems, so, there’s that.
And this is a headache for copper bulls. Because if America is shrugging at renewables and focusing more on oil and gas – “drill, baby, drill” – then it’s likely there’ll be other world leaders who see that as a dogwhistle to ease up on the net zero spin doctors. And with less apparent renewables momentum (because there’ll be less spin doctors,) it’s likely copper price growth will slow.
And that’s exactly what we’re seeing now (remembering other macro factors.)
Wall Street rally fades
Speaking of Trump – and noting Wall Street still has a Friday trading session to go – it looks like the enthusiasm for a red sweep on Wall Street has started to fade two weeks on.
The index has been wobbling this week, though for all intents and purposes, everything’s the same – the Mag7 remains in control, Tesla has found a second wind, and the tech giants are still very much the quo.
Less so for pharmaceutical majors. Here we must talk about Trump again – he’s appointed RFK Jr. as a health chief. This one isn’t too complicated: RFK is an anti-vaxxer.
Or ‘vaccine skeptic,’ if you want to accept his attempt at damage control.
Meanwhile, let’s look at what HotCopper liked this week.
HotCopper’s hot picks
On Monday, around 21,000 users flocked to see Resolute Mining’s (ASX:RSG) news its CEO was detained in Mali by the junta government over what appears to be a belief the company owes Mali taxes. The government has since demanded US$160M; Resolute is thought to be in negotiations.
On Wednesday, over 20,000 people took a look at Ovanti Limited’s (ASX:OVT) news it was selling its 21% stake in Indonesian finance entity i.Destinasi.Sdn Bhd for A$14M. HotCopper users were net pleased with the cash inflows to come from the deal. (It’s not been completely finalised yet.)
On Friday, it was Peninsula Energy (ASX:PEN) – down -22.9%. Heading towards a December recommencement of uranium production – now delayed – the company also flagged a budget blowout. Some 14,600 investors had run their eyes over that release by early afternoon on Friday.
That’s all for this week’s wrap – happy tidings and we’ll see you next week.
(Don’t forget to check out the news I spotted this week below – there’s never enough time to go through them all in these spiels!)
HotCopper’s Most Watched
- Users digest Resolute Mining CEO’s apparent semi-kidnapping in Mali
- Bigtincan Holdings’ Board recommends investors approve deal to list on NASDAQ
- Amaero makes its case for why niobium powders matter under Trump
Australian Stocks
- Like Wall Street and gold, CBA keeps hitting record highs despite sell ratings
- Wisetech hit with class action related to acquisition earnings projections
- MinRes mothballs lithium project after Liontown downsizes its own
Australian Economy
- Applications per job ad fall in Oz for first time in 2 years: Seek
- Chalmers warns on higher risk of trade tensions impacting Oz under Trump 2.0
- Local wage growth slows distorted by 2023 minimum wage increase
International Stocks
- US publicly listed prison operator stocks jump after Trump election
- Shell wins its appeal against the Hague that ordered it to cut emissions by 45%
- US pharmaceutical majors fall as RFK appointed Trump’s Health Chief
International Economies
- US Core Inflation remains at 3.3% YoY in Oct 2024
- UK unemployment jumps to 4.3% in September quarter; estimates were for 4.1%
- China’s latest stimulus announcement fails to replicate October rally
- Indonesia stimulus next?: Country gives small businesses 6 month loan forgiveness clause
Commodities
- Copper prices down nearly -9% WoW by Thursday despite Asia Copper Week – a 3mth low
- CBA iron ore analyst sees China waiting for Trump tariffs in 2025; calls <US$100/tn prices
- Gold hits five week low early week on Monday as Trump effect steals allure
Geopolitics
- US tells Taiwanese TSMC – NVIDIA’s chip supplier – to stop sending AI chips to China
- Some 9% of world’s copper is used in defence applications each year
- Milei’s Argentina pulls negotiators from COP29
