Global Markets

There is a market adage which goes, “April showers bring May flowers” It’s not trotted out as often as “Sell in May and go away” because it gets fewer clicks in today’s online world, but it has been far more accurate over the last decade. Overnight, the tech-based NASDAQ led US equities higher, with major indices basically closing at all-time highs ahead of the important CPI; the path of least resistance remains up at this stage, e.g. in May, the NASDAQ is up +5.4%, and the broad-based S&P500 +4.2%. If the inflation data comes in just “ok”, US stocks are poised to be at all-time highs before the end of the month.

• Our preferred road map over the coming weeks/months is the US market tests the 5500 area, now only 5% higher.

Overnight, we saw copper surge to fresh multi-decade highs, a very topical move as BHP attempts to secure AAL’s copper assets – it’s not helping the “Big Australian” get a bargain! The major global energy transition is helping drive the demand for copper at a time when meaningful new supply is hard to come by. Our core view remains, the trend is in its infancy, though a 25% in just two months is a big one. A rest here would not surprise but we have little interest in losing our position in Copper.

• We are bullish on Cu over the coming years, but the industrial metal has now reached our short-term target.