WSJ: BASE METALS: Comex Copper Inches Up On Equities, Retail Sales
Copper futures are modestly higher early Wednesday, supported by the stronger tone in global equities and a better-than-expected report on U.S. retail sales.
Around 9:06 a.m. EDT (1306 GMT), May copper, which has the most open positions, is up 1.30 cents, or 0.36%, to $3.6135 per pound on the Comex division of the New York Mercantile Exchange. Nearby but scarcely traded April copper is up 1.15 cents, or 0.32%, to $3.6070.
Traders said sentiment was helped by stronger global equities overnight, and the S&P and Dow futures are higher ahead of the open on Wall Street. Copper often follows rises in equities on ideas they bodes well for the economy and thus demand for the metal. Stocks have been helped by earnings from companies such as Intel and J.P. Morgan Chase, as well as by U.S. retail sales.
In fact, one trader noted, industrial commodities generally are higher, including crude oil. The June S&P 500 futures were up around 4.50 points, while Nymex May crude oil is 83 cents a barrel higher.
On balance, a stronger-than-forecast report on U.S. retail sales was supportive for copper prices, said Stephen Platt, an analyst with Archer Financial Services.
Copper initially fell back marginally as the euro did likewise. The metal often moves inversely to the dollar, since a stronger greenback makes it more expensive for holders of other currencies, and vice-versa.
Copper quickly moved back to roughly where it was ahead of the data, however.
March U.S. retail sales rose 1.6%, topping the consensus forecast of a 1.3% rise. Sales excluding autos were up 0.6%, as expected.
"It shows the economic recovery is still on track and probably a little stronger than people expected," Platt said. "That is helping support copper in terms of the market looking for some additional demand."
In particular, he cited the 6.7% jump in the sales of cars and parts, which use copper for electrical wiring.
"There is still investment and fund buying coming in from a technical basis helping maintain some of the momentum," Platt said.
Technically, Platt said, some resistance for May copper still lies around a trio of highs last week between $3.6350 and $3.6385. Above this, he listed Monday's $3.68 peak.
