The price of copper futures dropped on Thursday, as commodity futures brokers and traders reacted to data from the Federal Reserve Bank of Philadephia. The general economic index for the region dropped to negative 7.7 in August, the worst figure in a year. Economists surveyed by Bloomberg News had forecast an increase in the index to 7.
That news was accompanied by the latest jobless figures, which showed that in the week ending on August 14, jobless claims increased by 12,000 to 500,000, above even the worst estimates of analysts.
“The Philadelphia report was a really big surprise and really big miss,” Donald Selkin, the chief market strategist at National Securities Corp., told the news service. “I don’t see how the current economic conditions can support copper at these prices.”
Copper futures contracts for September delivery ended the day lower by 0.93 percent at $3.3185 per pound on the COMEX division of the New York Mercantile Exchange.
Up until this point, most of the economic recovery has been driven by improved manufacturing and businesses restocking inventories. If employment and consumer spending fail to pick up, the economy could be in real trouble.
There are, however, some concerns about supply, as China says it may shut the plants of polluting copper smelters for up to two years.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.