New York (CNN Business)Some investors see the price of copper as a precursor to the global economy. If you are one of them, there are good reasons to worry.
"Copper prices have just begun to explain the fact that global growth is slowing," Daniel Galli, director of product strategy at TD Securities, told me.
Metal is used in many construction materials such as electric wires and water pipes. That is, it is often seen as a substitute for economic activity, as demand tends to be hot when the economy is expanding and cold when it is shrinking. He is said to have a talent for prophecy, so he is lovingly called "Dr. Copper" among traders.
Russia is the world It accounts for 4% of copper production in London and almost 7% of nickel production according to S&P Global. Traders were nervous about possible supply shortages as the economic recovery from the pandemic was accelerating, and began to stock up aggressively.
Prices are heading in the opposite direction as the threat of recession is now well established.
"Once the urge to stockpile was over, global commodity demand began to reconnect with global growth," Gari said.
This is exactly what it looks like: The first examination of carefully watched economic indicators in June confirmed that economic activity was slipping into lower gear as food and fuel highs bite.
S&PGlobal's Purchasing Managers' Index, released Thursday, found that private sector production slowed "significantly" in the United States this month.
"After enjoying the mini-boom from consumers returning after deregulation of pandemics, many service companies are now seeing households increasingly suffering from rising living costs. Producers of non-essential commodities are seeing a similar decline, said Chris Williamson, chief business economist at Global Market Intelligence.
Federal Reserve Board raises prices Companies are becoming more stressed about their outlook as they aggressively raise interest rates to curb them.
"Companies' confidence is now at a level that usually signals a recession. Increases the risk of a recession, "Williamson said.
In Europe, June growth fell to its lowest level in 16 months, according to PMI measurements from 19 countries using the euro.
What Happens Next: China's growth is expected to recover later this year, and copper and other base meal prices should recover at that point, DWS's Commodity Portfolio Manager. Darwei Kung told me. It is not clear when that moment will come.
"They're back, it's a matter of timing," Kun said.
In the meantime, prices could fall further as economic instability continues.
"In the medium term, there is room for copper prices to fall, especially as we look at the barrel of the recession," Gari said.
Juul ban in the US accuses Altria stocks
Latest: Agency said Thursday that Juul was no longer able to sell or distribute vaping devices and pods, saying there was insufficient "sufficient evidence" to protect public health in doing so. Stated.
This announcement follows a long-standing study of whether brands have helped make vaping more popular among underage users.
Juul is considering an appeal. When pursuing that option, the product may potentially remain on the market while legal proceedings are taking place.
"We respectfully disagree with the FDA's findings and decisions and have sufficient information and data based on quality research to address all issues raised by the FDA. We continue to believe that we have provided, "said Joe Murillo, chief regulator of the company, in a statement.
But investors have already bailed out. Altria's stake, which owns a 35% stake in Juul, plummeted by more than 9% when the Wall Street Journal first reported on Wednesday that the FDA's decision would come. They rebounded slightly on Thursday.
Altria has invested $ 12.8 billion to acquire part of Juul's business in 2018. Transactions quickly moved south as concerns about the risk of inhaling vapors increased and US regulatory agencies called for a crackdown on e-cigarettes.
Juul was also criticized for selling arcpods with flavors such as mango, cream and cucumber that became popular with teens.
In 2019, the company discontinued its flavor products in the United States shortly before the FDA banned all e-cigarette flavors except tobacco and menthol in early 2020. However, the damage did occur.
Can you see the "Lehman effect" in the energy market?
Germany warns that Russia is significantly reducing access to natural gas. In fact, it's so vigilant that it's causing the 2008 financial crisis.
Minister of Economy Robert Habeck warned Thursday that maintaining companies in the energy sector "despite high additional costs" is essential to prevent market collapse.
If companies begin to succumb under the pressure of rising prices, "the entire market is at risk of collapse someday," Habeck said. "So Lehman Brothers will affect the energy system."
By declaring a national gas "warning" on Thursday, Germany is one step closer to distributing supply to businesses. This will have a major impact on the manufacturing center of the economy.
"Gas is about to run short in Germany," Habeck told reporters at a press conference in Berlin. "We're in a gas crisis, even if we don't feel it yet."
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