With all the volatility in the markets right now, attempting to read too much into a single day's trading activity is foolish. That being said, it is noteworthy that copper is moving higher on a day in which we get the news that US Housing starts fell in the month of February to the lowest level since April 2009. If that was not bad enough, building permits also dropped to a record low.
The problem in the US is the obvious glut of foreclosed homes and distressed home sales not to mention the poor labor markets and tougher credit standards.
Then why is copper moving higher especially on a day in which the equity markets are getting crushed lower out of fears over slowing global growth?
One possible explanation is that some traders are perhaps looking past the current and real slowdown fears and focusing on what they believe will be massive buys by the Japanese as they attempt to rebuild their shattered nation once they can somehow get the nuclear issue resolved. They are going to need enormous amounts of raw materials to rebuild parts of the nation which look to have been swept with a broom of destruction.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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