Again another week of falls on the world stock markets which has impacted on the price of the metal commodities. It’s hard to pin point the cause of recent falls with weak US economic data, weak China economic data and continued uncertainty on the Euro mess all being cited as reasons. In the UK the LME is closed for 2 days in observation of the Diamond Jubilee (and another Royal concert involving Elton John..) so a lot of traders are sitting on the sidelines until LME opens on Wednesday night. In Japan the official stock exchange index ,Topex, is now at its lowest level since 1983 and Sony shares at their lowest level since August 1980 (around a year after its landmark “Walkman” portable music player was released).
**** DJ BASE METALS: Copper Hits Fresh 5-Month Low After U.S. Data ****
Copper futures slumped 3.9% last week, as weak employment data in the U.S. and similarly bleak readings on manufacturing activity in China and the euro zone sparked a flight from growth-sensitive assets. That gloom continued on Monday, with readings on U.S. factory orders and New York-area business activity coming in weaker than expected. Copper is sensitive to shifts in the economic outlook because of the metal’s widespread uses across industries, with applications including heavy-duty power cables, plumbing and wiring in homes, as well as automobiles and consumer electronics. Traders, said Adam Klopfenstein, a market strategist with Archer Financial Services, are waiting for signs of stability in Europe’s debt crisis or potential government steps to prop up growth in the U.S. before betting on a rebound in copper and other growth-sensitive assets. “The labor market has slowed down,” Klopfenstein said. Friday’s reading on U.S. hiring in May “really caused a lot of investor apprehension.”
**** DJ WSJ(6/2) Commodities Report: Raw Materials In A Free Fall ****
Most commodities tumbled after dismal economic news spurred fears that global growth is slowing and eroding demand for raw materials. Brent crude, the European oil benchmark, plunged below $100 a barrel to its lowest level in almost 17 months, while U.S. crude neared $83 in the wake of weak manufacturing data from Asia and Europe and disappointing U.S. jobs data. Copper hit its lowest level in five months, while cotton fell to a 28-month low. “Their prices are getting bushwhacked because everybody is afraid that these economies are going to slow down and the demand for all these commodities is going to be diminished substantially,” said Mark Waggoner, president of Excel Futures, a commodities brokerage in Bend, Ore.