As we have said dozens of times before, the first time you see something it’s a data point. The second time you see it, it’s a line and the third time you see it, it’s a trend. But a trend in rising consumer confidence was not to be had this month as the Conference Board reported much-lower-than-expected index numbers of 49.3, down from 54.8 in May (investors had expected the number to remain in that 55 range) Consumer confidence had increased for both April and May.
What does that mean from a metals market perspective? We put consumer confidence squarely in the realm of demand signal. And as we have argued recently with regard to aluminum and copper, as well as steel, the price increases may not be sustainable. Other economic indicators also suggest a long haul ahead, particularly for housing according to this Bloomberg article.
This news reminds me of something that once struck me as odd last year, when the prices for many commodities skyrocketed. We as market observers often believe markets move one of two ways ” up and down. But in reality, they often spend quite a bit of time moving sideways. And though we are long term optimistic about the economy, we may skate sideways for some time yet.