Why rising oil and copper prices are ‘completely detached from reality’, says Commerzbank

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The GameStop GME frenzy, -5.09% may have cooled off, but attention will turn to the aftermath later on Thursday as lawmakers stand ready to question key players. Several major players will face the House Financial Services Committee at noon following the backlash against online trading platform Robinhood and decisions by other brokers to temporarily restrict the trading of some of the so-called meme stocks, like that video game retailer, last month.

The bond market sell-off and rising Treasury yields also remain in focus, confirming optimism about the COVID-19 recovery, but also raising concerns that inflation could rise. The yield on the benchmark 10-year Treasury TMUBMUSD10Y, 1.287% is up 38 basis points this year. US stocks fell at the open after weekly jobless claims hit 861,000, the highest level in a month. BRN00 oil prices, -0.03%, continued to climb, after US CL.1 prices closed above $ 60 on Wednesday as freezing conditions kept refineries in Texas and production shut. interrupted. In our call for the day, Commerzbank analysts said that commodities were “completely unrelated to reality,” noting that oil prices in particular were not being affected by news that would normally bring them down. The recent spike in metal prices was also beginning to look “excessive,” they added. “Nothing seems capable of stopping the rise in oil prices right now,” energy analyst Carsten Fritsch said, noting that Brent has made gains in 14 of the last 15 trading days, rising roughly $ 10 in three weeks. . A number of developments are being ignored, he said, including reports that higher prices have led the Organization of the Petroleum Exporting Countries to consider gradually increasing oil supplies starting in April, and the likelihood that Saudi Arabia will not extend your voluntary production cuts further. the end of March. “This selective perception is characteristic of markets in phases of excess,” added Fritsch. “Normally, oil prices should have responded to such news by falling significantly because this will likely bring up to an additional 1.5 million barrels of crude oil per day to the market in April,” he said. This detachment from reality is also present when it comes to copper HG00, + 1.82%, which reached its highest level since April 2012 on Thursday, as well as nickel and aluminum, which have also reached multi-year highs, they said. Commerzbank analysts, largely hoping for a major global economic recovery. Analysts noted that Chinese traders have returned to the markets after a week of vacation, pushing prices up. However, industrial and precious metals analyst Daniel Briesemann said there is no new data to support the “steep rise” in metal prices in recent weeks. “In our opinion, metal prices are being driven largely by speculation and the rally is starting to look excessive. From a technical perspective, copper and aluminum are again overbought today, measured against the relative strength index, ”he said in a note. GC00 gold, + 0.16%, which fell below the key level of $ 1,800 an ounce earlier this week amid rising bond yields and the strength of the dollar, is also detached from reality, but in a way opposite, Fritsch said. Jeffrey Gundlach is about to become a bitcoin BTCUSD, a fan of -0.82%? The Markets US stocks fell at the open, with the Dow Jones Industrial Average DJIA, -0.90% falling 0.9%, or 280 points. The S&P 500 SPX, -1.01% and the Nasdaq COMP, -1.44% also fell. European stocks also fell as investors took in mixed corporate earnings. Tech stocks drove Asian markets lower overnight. The buzz Tilray TLRY, + 1.29% cut losses and boosted revenue in the final three months of 2020, as it prepared to merge with Canadian marijuana company Aphria APHA, + 0.70%. Tilray shares were up more than 8% in premarket trading. Walmart WMT, -5.49% announced a new $ 20 billion share buyback plan as the retailer’s earnings fell short of forecasts. Google GOOG, -1.04% has reached agreements in Australia to pay for journalism, while Facebook FB, -2.58% has promised to restrict the exchange of news while Australian lawmakers consider forcing the digital giants to make payment agreements. Mining stocks gained on Thursday as copper futures rallied, reaching the highest level since April 2012. Rio Tinto RIO, Antofagasta ANTO, + 0.03% and BHP BHP, -0.42% were among the highest. Shares of Apple AAPL, -2.14%, fell to a month-low on Wednesday, after the tech giant’s two biggest shareholders said they had cut their stakes. Airbus AIR, shares of -2.78% fell more than 3% as the aircraft manufacturer’s guidance for 2021 disappointed investors. The company said it does not expect to deliver more aircraft in 2021 than the 566 it delivered in 2020. Random reads: “I was invited to receive a COVID-19 vaccine because the National Health Service thought I was 6 cm tall.” The man finds a sea mine on the beach and takes it home to use as a footrest. Need to Know starts early and updates until the opening bell, but sign up here to receive it once in your email box. The e-mailed version will ship at approximately 7:30 am ET. Do you want more for the next day? Sign up for The Barron’s Daily, a morning investor briefing, featuring exclusive commentary from the Barron’s and MarketWatch writers.