The metal is processed in many industries and is considered a leading indicator for the economy and stock markets. Rightly so?
(Photo: Bloomberg/Getty Images)
Dusseldorf The copper price has a reputation as a leading indicator for the economy. Because the semi-precious metal is used in many industries. If the copper price falls, it can – so the theory goes – indicate lower demand and an imminent recession. Rising prices, on the other hand, can signal an imminent upswing.
In stock market jargon, Kupfer therefore has the nickname “Dr. copper”. But can copper actually predict the direction of stock prices? The portfolio managers Sven Lehmann and Marcel Müller from HQ Trust have investigated this. And found out: Dr. Copper is a very bad indicator for future price developments.
The experts from HQ-Trust evaluated data from the years 1980 to July 2022. They calculated the return of Datastream’s global stock index, depending on the “momentum” for copper and other selected commodities such as oil or nickel.
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