One distinct aspect of tonight’s market action is the divergence between copper and oil prices. As oil surges almost 8% higher copper is dropping 1%. This is a clear sign that the rise in oil prices is causing fears of a global economic slow-down. The risk of turmoil in the Middle East has the potential to have a very real impact on the global economy. Weak developed markets likely can’t handle a sustained shock from higher oil prices. Tonight’s decline in copper prices appears to be reflecting this belief.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.