Monday's Market Minute: Copper, Crude, And Central Banks

Another busy week for investors and traders ahead in terms of eco-data earnings and overall potential market movers. Let’s take a market minute to get ahead of what’s to come.

Investors and traders are exhibiting a bit of caution tied to concerns related to COVID infections on the rise here in the U.S. and globally. COVID concerns have U.S. indices lower to begin the week, and have sparked a classic “risk-on” scenario with treasury futures higher and the U.S. Dollar above 93.00 to a new July high. Crude oil futures are lower following the news that OPEC agreed to increase production. Crude is set to begin the week below $70 for the first time since the beginning of June.

In terms of economic data, the focus will shift from Fed Chair Jerome Powell‘s semiannual testimony to lawmakers and inflation data to housing and central bank activity, with the ECB and the FOMC both meeting this week and announcing interest rate policy decisions. Today, we have the Housing Market Index, Housing Starts, and Building Permits, with Existing Home Sales later in the week. Also, keep an eye on weekly Jobless Claims due out Thursday and the 20-Year Bond Auction on Wednesday.

As far as companies reporting quarterly results, keep an eye on earnings from IBM IBM, J.B. Hunt JBHT, Netflix NFLX, Chipotle CMG, Coke KO, CSX CSX, Snap SNAP, and Amex AXP, to name a few, but the list goes on. After last week’s mixed results to the official start to earnings with the banks mostly unable to impress investors, it will be key to see if the companies this week can help stocks regain composure.

Lastly, keep an eye on copper; it’s been weak relative to the move up in U.S. indices and energy products. The divergence has been playing out since copper sold off its all-time highs back in mid-May. Copper, crude and U.S. indices often track each other very closely, and the divergence should be watched closely as many point to it signaling the last leg up in the stocks and energies was a bit overdone.

Image by sergei akulich from Pixabay