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Steady As She Goes... December 20th, 2019 by John Gross

Overall, it’s been a couple of good weeks for the markets, with support lines continuing to hold, and prices still advancing.

Copper closed out the week at $2.81, a seven month high, and is well above its 52 week moving average.

The rest of the nonferrous metals are also looking firmer, despite significant ‘deliveries’ into LME warehouses, particularly aluminum, tin, and nickel.

Crude oil remains a focus of attention as it closed above $60 again, reaching its highest level since May, and is also trading above its 52 week average.

At the risk of repetition, while the fundamentals and market sentiment argue for lower oil prices, the technical view suggests higher prices ahead. To state the obvious, only time will tell which side is right.

And despite trade wars, social unrest in many countries, Brexit, military threats, and political upheaval in Washington, and elsewhere, equity markets here and abroad climbed to record highs last week.

How do we account for this apparent dichotomy?

Some say it was the Fed rate cuts rates that pushed markets higher, along with progress on trade issues. Others believe it was due to China’s injecting billions of dollars into their financial system that contributed to the rising tide.

We are inclined to believe it is / was ‘The Mystery of The Markets’, coupled with Adam Smith’s ‘Invisible Hand’ at work, and so while there may be many ideas and theories to explain strength in equities, we will probably never know the real answer.

And there you have it.

The Best To You And Your Families For A Happy Holiday Season,
John


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