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Markets you probably aren’t Monitoring
Our financial editor investigates some useful indicators to help identify tone in the market
Copper is used in everything from cars to domestic appliances. Its ductile nature allows it to be used for electronic devices. The price of copper has gone down significantly this year which could indicate that productivity has gone down drastically as when there is less demand for copper usually that is because less stuff is being made. However, we can start to see it creep up a little from its lows regaining faith in the market for many investors.
Transportation is a great way to track where the economy is heading. If transportation isn’t performing, then neither are the industries. If we look at the US’s Dow Jones Transportation Index we can see that transportation was bouncing back from its lows this year but recent data shows it’s going back down indicating that the economy is yet to fully recover from covid and other geopolitical tensions.
Small cap companies are just companies with low amounts of capital. They are a good indicator of risk appetite in the market as they outperform investors in rising markets but full faster when the markets are bearish. The UK FTSE small cap index has been performing terribly this year and has been one of the worst performing global indices.