- S&P cut Italy’s credit rating to A from A+ with a negative outlook.
- German ZEW survey improved to -43.3 in Sept vs -45 exp. And -37.6 prev. The current situation component declined to 43.6 vs 45 exp. and 53.5 prev
This is important because copper has had an uncannily tight leading relationship to the S&P over the past 4 years. In particular, Copper appears to have been leading the S&P by almost exactly 12 weeks, with several incidences of coincident local extrema. (In other words, it is a chart monkey’s dream)
Of course, correlation does not imply causation, but when a dandy chart like this lines up with one’s fundamental views, it’s tempting to put more weight on it. If the relationship holds, we’ll see the S&P reach a local high around Thanksgiving before falling again.