The Beginning of Donald Trump Influencing Futures Markets

This morning we got off a call with a talented investment manager with a program that trades almost 95% Copper.  Jaguar Investments Limited’s managers mentioned to us that last week’s move in Copper was the biggest weekly move in 30 years – moving up more than 20% in the last couple of days. {Disclaimer: Past performance is not necessarily indicative of future results}. Copper is still below its 2011 highs, but this has to be one of the most surprising moves in the copper market for quite some time.

copper-chart-finviz

It shouldn’t come as much of a surprise, though, that one of the most surprise inducing elements of our time (remember that flash crash down on election night followed by a full recovery and mini flash crash up), President-Elect Donald Trump, is the force behind the move. Not necessarily that he was elected, but that he promised to spend $10 Trillion dollars in infrastructure over the next 10 years, even if we might have to wait and see what happens with the metal market until Trump’s supposed plan gets put into place, via Financial Times.

“Timing wise, a US infrastructure stimulus is unlikely to kick in until the third quarter of 2017 and would in our view have the largest effect on steel, zinc, and nickel demand,” said Goldman analyst Max Layton.

But Financial Times is suggesting that Copper’s move is a combination of Trump’s priority to infrastructure and China’s buying power.

As the renminbi has weakened retail investors in China have been looking for US dollar-linked assets to buy.

Copper has been one choice and steelmaking ingredient iron ore another. Coal had been a popular play until policymakers introduced curbs to cool prices and speculative buying over the past couple of weeks.

“We saw a lot of Chinese buying coming through — it was orderly until then and now it’s become a little bit disorderly,” said Michael Widmer, an analyst at Bank of America Merrill Lynch. “Views over a potential fiscal stimulus in the US just brought more buyers into the market and drove prices still higher.”

There’s no doubting Copper is an early winner post-election,  but only time will tell if Copper will add to or fall off from this massive move based on the Trump administration’s follow through on those infrastructure plans.  One thing is for certain, though – these are just the type of directionally volatile moves systematic futures traders welcome and enjoy.

Want even more insight on Copper and how to fit tactical exposure to the market into your portfolio? Join our webinar we are hosting with Jaguar Investments Limited, this Wednesday, at 10 am central time. Sign up to hear their thoughts on this week’s move and what it might mean for the market to come.

 

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Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

Disclaimer
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.

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