Last week’s copper import data release for September from China caught many observers by surprise.  At 399,000 metric tons, arriving shipments increased from August by 23%. With more questions than answers raised by these figures, Shanghai contracts saw selling pressure on heavier than average volume and declining open interest on Friday before last night’s snap back as traders are beginning to suspect that copper is being stockpiled in China.  In fact, China has imported 1.9MM tons year-to-date, which us up 77% from a year ago.


The two critical factors for traders this week will be the NBS release of production data for September and the weekly stock level report by the Shanghai Exchange on Friday. If production failed to keep pace with imports last month then rising stock levels should weigh on the futures market, potentially offset if Friday’s stocks track inventory reports to date –which have not indicated a dramatic increase, indicating that late summer levels were lower than originally thought.


From a macro perspective, either outcome –rising stock levels or heated production, support continued concerns about forming asset bubbles on a shorter duration (either commodity or construction), while also supporting continued strong growth trajectory on a longer duration (barring a dramatic shortfall in production figures, something we do not factor as likely). 


The concerns articulated by traders in Shanghai futures market last week have also been supported by inventories building on the Comex and LME.  In aggregate, the combined total on both exchanges is now over 400,000 metric tons, which is significantly above the low set in July of 312,357.  Last week oil was up 9 – 10%, while copper was essentially flat which has us wondering whether these supply data points are starting to offset the perception of improved economic demand in 2010 and U.S. dollar weakness as the key drivers of copper’s price.


Daryl G. Jones

Managing Director


Andrew Barber







Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more