Caught the Copper rally as the market shifts (again) from recession to stagflation trades. Central Banks are beginning to follow suit to the Fed's inactions that they have come to end of higher rates to suppress inflation, in lieu of a global slowdown. The high NFP number changed all that. America's CPI cold be heading towards 10% . Maybe it is time to price in a 1.00% rate hike by the Fed.

 

As noted in this post, both Copper and Nickel have been extremely oversold, Copper, with the market mispricing that the global economy is going into a recession and Nickel, which is very tough to call a rally since it has been heavily shorted and suppressed by major market players (until the next short squeeze).  I caught the Copper rally, please refer to the Chart. 1, as noted that the Copper price was slightly dragged up with electrical car stocks.  Although the main issue/s affecting commodity prices is not only is there is brutal stagflation storm brewing, geopolitical issues are becoming a major concern for both Europe an Asia.  And it doesn't help when Central Banks confusion and inaction by the assumption that Wall Street investment banks have been calling a recession.   Which doesn't exist.   Yet, the Federal Reserve, despite the lack of clarity in both guidance on a recession and rampant inflation, is acting like America is in a slowdown, however recent Non-Farm payrolls clearly show's that it's s not, in fact the American consumer is in hyper drive as consumption (driven by rising prices) is blowing out further.  All eyes on the next week's CPI, which could be getting close to 10%.

The Fed, may, by sheer necessity, have to pick up the towel and sensibly increase rates over 0.75%.  A shock and awe of 1.00% would probably do the the trick.  Any more ambiguity and attempts to rally stocks for mega firm portfolios with half baked rhetoric, they will lose all credibility as a Central Bank.  A lot is at stake.

Trade with wisdom.  Be careful.