In today’s briefing:
- Why the Detox Isn’t Over
- A Sector and Factor Review of Market Internals
- Copper Tracker 12th May 2025: Bullish On China’s Whopping Copper Imports
- Iron Ore Tracker (12-May-2025): Looking for Green Shoots In Iron Ore
Why the Detox Isn’t Over
- Treasury Secretary Bessent has warned about a detox period for the U.S. economy.
- While the recent dramatic stock market recovery m0ay have raised hopes of a bullish revival, we think the detox period isn’t over.
- The market templates of today’s market are the false dawn recoveries after Bear Stearns bankruptcy in 2008 and the February 2020 rally before the full effects of COVID-19 were known.
A Sector and Factor Review of Market Internals
- A review of factor and sector leadership in the U.S. equity market reveals short- and intermediate-term cross-currents.
- The underweight of risk by hedge fund, vol control funds and other systematic traders are likely to put upward pressure on stock prices.
- On the other hand, investors cannot ignore signs of growing anxiety over the health of the U.S. economy and confidence in USD-denominated assets.
Copper Tracker 12th May 2025: Bullish On China’s Whopping Copper Imports
- China’s copper and concentrate imports surged 24.4% YoY to 2.92 million tons, while the Yangshan Premium exceeded $100/ton, reaching a one-year high, indicating robust demand and tight supply conditions.
- The easing of US-China trade tensions, with the US expected to reduce tariffs, could potentially support a more bullish market outlook in the near term.
- We provide updates on Lundin Mining (LUN CN )’s latest Q1 results and updates from their call on Vicuna Minerals.
Iron Ore Tracker (12-May-2025): Looking for Green Shoots In Iron Ore
- Iron ore prices remain around $97/ton, down 0.5% WoW, staying within a long-term range of $95-$130/ton over the past four years, indicating sustained price stability at the lower end.
- With weather conditions improving in Australia, we expect iron ore shipments to start increasing and China to import more than 100 million tons/month.
- We like Fenix Resources (FEX AU). The company recently presented at the RIU Resources Round-up Conference in Sydney on 7 May 2025.
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