Reuters Insider - Inside the News: Copper FuturesTarget -- $4.50, Says Henwood
13/06/2016 10:59
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Source: Thomson Reuters
Description: Reuters Commodities Specialist Christopher Henwood
says a volatile mix of fundamentals on the supply
and demand sides of copper will be driving prices
higher for the foreseeable future.
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Transcript (May be auto-generated)
Time to go inside the news at 11AM. A positive earnings from Conagra and Adobe
pushing stocks higher at the moment. The Dow, S&P and NASDAQ all of about
one-half of a percent each. The Fed is also just concluding its first round of
bond purchases on the day. Treasury is modestly higher in tandem with that. The
Fed will be buying TIPS this afternoon and Reuters Credit Analyst Ed Rombach
will have more on the initial purchases in our noon update. Sources are telling
Reuters the US Treasury Department plans to sell a large chunk of its stake in
AIG in two big stock offerings next year. The Treasury will sell any remaining
stock in the company in 2012 officials said. Government will profit from the
sales if it manages to offload its stake at $30 a share or higher. A sale of AIG
by the Treasury would mark the first of the government's exit from the bailed
out insurer. AIG received $182.3 billion in rescue funds during the financial
crisis. AIG shares north of $50 right now. The FCC is meeting right now to vote
on controversial net neutrality rules. It would ban high-speed Internet service
providers from blocking or slowing lawful content. However, they would allow
phone and cable companies like Comcast and Verizon to charge consumers based on
their usage.
You can catch a live stream of the vote on our Reuters Insider platform. Copper
rose to a record high in both London and New York today on supply concerns after
Chile's Collahuasi mine halted shipments. Joining us now with more is Reuters
Commodity Specialist Chris Henwood. So Chris, is this just a headline reaction
or, you know, is there something else going on? Basically, it's fundamental
driver. We have a volatile mix right now of very tight supplies and the copper
market, on top of increase of demand looking out into 2011 especially out of
China. That seems to be a big name in the demand side. Now, you throw into that
the spark which is the Collahuasi situation, the world's number three copper
miner, their export facilities had an accident, they shut down, they can't
export any copper out of Chile. Force majeure declared, that's driving prices
higher. If we pull up a chart in copper, you can see that today, we made new
all-time highs here. Technicals are overly positive on this chart.
$4.50 is where we're going to be looking to move next. That's the next big
milestone to this market to the upside. But the bottom line is, this is a simple
equation. Demand is currently outstripping, I'm sorry, demand is currently
outstripping supply and we have fundamentals just driving the market. So we look
for higher prices in copper for the foreseeable future. Alright. Thanks, Chris.
Well, in our today's hot stocks, shares of Carnival Corporation are changing
hands in about their average daily volume from the past 30 days. Less than two
hours into the start of trading. And they're up about 3%. The cruise line
reported a rising profit and issued a 2011 forecast that exceeded most
estimates. And Skechers is trading hands at about 150% of its average daily
volume from the past six weeks. Stock is down more than 9%. Sterne Agee cut the
footwear company to sell from buy and drop its price target to $16 from $30.
Ahead, today's chart room, Reuters Quantitative Analyst Mike Tarsala will tell
you what Thomson Reuters trend intensity indicator says about how much further
the S&P has to go. Our next update's at noon. I'm Dan Burns, this is Reuters
Insider