All Over The Map... September 20th, 2019 by John Gross

It feels like one step forward, and two steps back now.

The recent sense of optimism in trade talks evaporated again, as China’s delegates went home early, and empty handed.

Attacks on Saudi oil refineries sent prices sharply higher, in a knee jerk reaction, only to see them recede days later.

The Fed cut rates again, despite continued low unemployment; strong consumer spending, and equity markets at or near record highs.

Although the Fed is ‘data driven’, it’s the global slowdown they are concerned about.

General Motors workers walked off the job for the first time in a long time, resulting in the potential loss of $25 - $100 million per day in operating income depending on which analyst you follow. That’s a lot of metal not moving.

And apparently, there was some sort of plumbing problem within the New York Fed requiring the injection of $53 billion to unclog the overnight repo system. After reading, and rereading about the problem, we still don’t understand it.

On a happier note, the housing market is doing better as the attached charts illustrate.

Building permits rose 7.7% during August to an annualized 1.42 million, and putting the figure 12% over the year ago period.

Housing starts on the other hand climbed 12.3% during August to 1.36 million, up 6.6% from last August.

Nevertheless, we are still well short of the pre-crisis level of activity in both categories as the attached charts illustrate.

It’s been a rough tough road for metals over the past sixteen months, and until we get some resolution to trade talks, it will remain difficult.

Regards,
John

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View Charts (PDF)

View Housing Permits (PDF)

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