Equity markets sold off in early trading to the tune of -0.7% reaching a low of 1854 on the SPX. As the day progressed, that trade was completely unwound and the SPX went unchanged by midday. The SPX closed about 0.8% off its all time high of 1883.57 reached on March 7 with the initial reaction to the Employment Situation report. Economic releases have been light this week with Retail Sales, Jobless Claims, and the Producer Price Index still to come, but I think it is likely that markets are still fluctuating from the Employment Situation report last Friday. As a reminder, the SPX began the year at 1848.36 and equity market performance continues to exhibit a plateauing pattern.
Focus has turned to Copper prices and their implication for the Chinese economy. Copper has long been a coincident indicator for the global economy, but has become more and more an indicator of the Chinese economy given thier industrial growth and Copper’s ties to China’s financial system. The price of Copper is down about 13 percent YTD and down about four percent this week alone. Concern is spreading that a slowdown in China will have global economic impact.
Those implications are longer term in nature and investors should expect a modest trading range over the next few days.