Gold and crude oil were higher overnight but Dr Copper, the commodity with a PhD, was sold down heavily, losing more than 3% in overnight trade after Chinese industrial profits tanked 8% last month.
That follows a fall of 4.2% in November and the 8% print was the biggest fall in the series. Even after the falls, industrial profits ended the year up 3.3%. But it is the speed of the decline, the acceleration, which really has traders worried.
Last week’s release of Q4 Chinese GDP showed economic growth falling to its slowest pace since 1990.
The weakness in industrial profits suggests that the targeted stimulus is not gaining traction, with even usually ebullient Shanghai stock traders unable to find the silver lining in the message that more stimulus is needed.
Here’s the copper chart showing prices back near 5-year lows:
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