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Market News Posted by John Doherty April 28, 2024

Copper Futures, Stagflation, and a Heavy Economic Calendar

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Top things to watch this week

The Economic Calendar:

MONDAY: Dallas Fed Manufacturing Index (9:30a CT)

TUESDAY: Employment Costs (7:30a CT), Redbook (7:55a CST), Housing Price Index (8:00a CT), Case-Shiller Home Price Report (8:00a CT), Chicago PMI (8:45a CT), Consumer Confidence (9:00a CT), Dallas Fed Services Index (9:30a CT), 2-Day FOMC Meeting Begins

WEDNESDAY:  MBA Morgage Applications (6:00a CST), ADP Employment Report (7:15a CT), Treasury Refunding Announcement (7:30a CT), S&P Global Manufacturing PMI (8:45a CT), Construction Spending (9:00a CT), ISM Manufacturing Index (9:00a CT), JOLTs (9:00a CT), EIA Petroleum Status Report (9:30a CT), Fed Rate Decision (1:00p CT), Fed Chair Press Conference (1:30p CT)

THURSDAY: Challenger Job Cuts (6:30a CT), Jobless Claims (7:30a CT), Balance of Trade (7:30a CT), Import/Export Prices (7:30a CT), Factory Orders (9:00a CT), Vehicle Sales (9:00a CT), EIA Natural Gas Report (9:30a CT)

FRIDAY: Unemployment Rate (7:30a CT), S&P Global Composite PMI Final (8:45a CT), ISM Services Index (9:00a CT), Baker Hughes Rig Count (12:00p CT)

Key Events:

  • Traders are focused on the FOMC decision and post-meeting comments on Wednesday.
  • Traders will also scrutinize the jobs reports that are due to be released on Friday.
  • Busy with earnings reports on Apple, Amazon, ConocoPhillips, Pfizer, and Coca-Cola.
  • Economics reports on jobs, home prices, manufacturing, and services PMI.
  • Eurozone inflation data will be watched as traders seek further confirmation of whether the ECB will cut interest rates
  • The traders’ focus remains on the Japanese yen, which has dropped to 34-year lows against the dollar.


The S&P 500 and Nasdaq 100 surged last week, closing up 2.65% and 3.94%, respectively. This positive performance can be attributed to strong earnings reports from tech companies, particularly those in the AI and cloud computing sectors.

These results fueled optimism about continued growth in these areas, overcoming concerns about potential interest rate hikes by the Federal Reserve.

A significant trend has emerged, with nearly a third of S&P 500 companies reporting earnings. Around 80% have surpassed analyst estimates, with overall earnings growth climbing to nearly 7%. This aligns with initial forecasts for the first quarter and represents a rebound after a dip earlier in the month. Blended first-quarter earnings estimates, which combine reported results with forecasts for remaining companies, have also returned above 3%.

Key Takeaways:

  • All sectors except Real Estate (IYR) are trading higher year-to-date.
  • The Energy (XLE) sector has seen the highest year-to-date increase at 14.19%.
  • The Real Estate (IYR) sector has seen the largest year-to-date decrease at -8.94%.
  • Over the past five days, the Technology (XLK) sector has seen the biggest increase at 3.79%.
  • Over the past month, the Russell 2000 (IWM) sector has significantly declined at -5.38%.

Stock Sector Performance Sheet 04-28-2024


Last week’s economic data brought back unwelcome memories of the 1970s phenomenon – stagflation, a period of high inflation combined with sluggish economic growth.

The Bureau of Economic Analysis (BEA) reported U.S. GDP growth at a mere 1.6%—the slowest rate in nearly two years. This fell short of analyst expectations of 2.4% growth, and stock markets reacted negatively to this news.

While Treasury Secretary Janet Yellen attempted to downplay the data’s severity, highlighting underlying economic strength, the inflation picture remains concerning. The Personal Consumption Expenditures (PCE) price index, a key inflation measure for the Federal Reserve, rose to 3.7%, exceeding the 2% seen in the previous quarter. This sticky inflation presents a significant challenge for central bankers navigating the economic landscape.

Bloomberg US Growth 04-28-2024

Source: Bloomberg


At Wednesday’s meeting, the Federal Open Market Committee (FOMC) is widely expected to maintain the current federal funds rate target range of 5.25% to 5.50%. This decision comes amidst conflicting economic signals.

On one hand, recent data suggests persistent inflation (“sticky inflation”) and a potential slowdown in economic growth. This may encourage the Fed to remain cautious and hold rates steady. However, the minutes from the March meeting revealed that most FOMC participants anticipate a shift towards a looser monetary policy stance (“less restrictive or dovish”) later this year.

Market participants will be closely attuned to how Chair Powell addresses recent increases in inflation data. Following the March Personal Consumption Expenditures (PCE) report, traders initially priced around 0.36% (36 basis points) of rate cuts by year-end.

While the FOMC’s March economic projections forecast three rate cuts this year, bringing the target range down to 4.50% to 4.75%, recent hawkish comments from some Fed officials have tempered expectations. Currently, financial markets only fully expect one rate cut by the end of 2024.

CME FedWatch 04-28-2024

Source: CME FedWatch


Copper futures are experiencing a significant upswing, reaching a new two-year high. This surge can be attributed to a confluence of factors creating a “perfect storm” in the copper market.


  • Sanctions imposed on Russian metals have significantly tightened supply on a global scale. This disruption restricts access to a key source of copper, pushing prices upward.
  • Structural demand for copper remains robust, particularly from the green energy sector. As the world transitions towards renewable energy sources, copper, a vital component in electric vehicles and solar panels, is experiencing increased demand. This strong demand, coupled with the restricted supply, creates a situation where copper is becoming increasingly scarce.
  • Market signals further reinforce the tightening supply picture. Low treatment and refining charges in China, a major copper consumer, indicate a growing supply deficit. These charges typically rise when raw copper is abundant, but their current rock-bottom levels suggest smelters are struggling to keep up with demand.

Finally, the recent news of BHPs proposed $39 billion takeover of Anglo-American adds another layer to the story. This potential merger would create the world’s largest copper miner, further consolidating the industry. This consolidation trend suggests industry giants are preparing for a future with sustained high demand for copper.

Copper Futures Chart


Crude Oil futures had a rollercoaster ride this week. Initially, they dipped after the GDP report, likely due to concerns about stagflation – a combination of stagnant economic growth and high inflation. However, the trend reversed later in the session.

Analysts believe the underlying factors for oil are quite positive. They point to two key drivers: geopolitical tensions and a looming supply shortage. Geopolitical tensions, which can disrupt oil production and exports, are a constant worry in the market. Additionally, analysts predict record demand for oil next month, which could outpace supply and push prices even higher.


The natural gas market is currently navigating a complex landscape. While storage reports indicate a significant supply surplus, prices haven’t fallen as dramatically as some might expect. Let’s delve into the key factors influencing this situation:

  • Natural gas prices struggle despite high supply: Although storage injections are high, indicating a supply glut, natural gas prices haven’t fallen as much as expected.
  • Freeport LNG is a major drag: Reduced flows to Freeport LNG due to technical issues hinder export capacity and prevent a larger price decrease.
    Langport expansion uncertain: The potential for expanded LNG export capacity at Langport faces delays due to a government study on LNG exports, discouraging investment in the US energy sector.

Additional Information:

  • Freeport LNG, the second-largest US LNG export facility, has been operating below 80% capacity due to technical problems since mid-January.
  • This has limited US LNG exports and contributed to the current supply glut.

quote of the week

The quote from Bruce Kovner, American billionaire hedge fund manager of CAM Capital:

“I know where I am getting OUT, before I get IN!”

Asset class performance sheet

These performance charts track the daily, weekly, monthly, and yearly changes of various asset classes, including some of the most popular and liquid markets available to traders.

Asset Class Performance Summary 04-28-2024

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