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Copper Futures Settle Essentially Unchanged Despite Stronger-Than-Expected Data

Strategic Insights

— 1 min read

Copper prices remained unchanged on August 26, 2009, despite the release of stronger-than-expected durable goods and new-home sales data. The data showed a 4.9% increase in orders for durable goods, the largest gain since July 2007, and a 9.6% increase in sales of single-family homes, the highest number sold since September 2008. Market analysts attributed the lack of significant movement in copper prices to the market having already priced in the positive economic news and the impact of the US dollar and oil prices on the market.

Key Takeaways:

  • Copper futures settled essentially unchanged at $2.8770 a pound on the Comex division of the New York Mercantile Exchange, despite a 4.9% increase in orders for durable goods and a 9.6% increase in sales of single-family homes.
  • The Commerce Department reported a 4.9% increase in orders for durable goods, the largest gain since July 2007, which was stronger than the 3% gain projected by economists surveyed by Dow Jones Newswires.
  • Sales of single-family homes increased by 9.6% to a seasonally adjusted annual rate of 433,000, the highest number sold since September 2008 and above the 1.6% gain projected by economists surveyed by Dow Jones Newswires.
  • Market analysts believed that the market had already priced in the positive economic news and was looking for new catalysts for copper prices to move.
  • Frank Lesh, broker and futures analyst with FuturePath Trading, noted that excluding the transportation sector, orders for all other durables only climbed 0.8%, suggesting that the "Cash for Clunkers" program was not as effective as expected.
  • Inventories of copper stored in London Metal Exchange warehouses fell 200 metric tons on August 26, leaving them at 296,400.

Statistics:

  • Copper futures settled at $2.8770 a pound on the Comex division of the New York Mercantile Exchange.
  • Orders for durable goods increased by 4.9% to a seasonally adjusted $168.43 billion.
  • Sales of single-family homes increased by 9.6% to a seasonally adjusted annual rate of 433,000.
  • Inventories of copper stored in London Metal Exchange warehouses fell 200 metric tons, leaving them at 296,400.

Sources:

  • Dow Jones Commodities News via Comtex
  • Archer Financial Services
  • Country Hedging
  • FuturePath Trading
  • Dow Jones Newswires
  • Copyright (c) 2009 Dow Jones & Company, Inc.

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