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Copper Rises on China, Trimming Big Quarterly Slump

China’s official purchasing managers’ index rose this month, up from a record low in February, signaling the world’s second-largest economy is restarting. While the outlook remains uncertain as the country faces a growing threat from slumping external demand, production cuts at major mines around the world are shoring up sentiment for copper.

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Comments of the Day

01 April 2020

 

Video commentary for March April 11th 2019

 

Eoin Treacy's view

A link to today's video commentary is posted in the Subscriber's Area. 

Some of the topics discussed include: stock markets ease on the last day of the quarter, gold and oil ease, bonds firm, deep and short versus deep and long recession risk discussion of the prospects for dividend growth stocks.

 

Email of the day on UK listed investment trusts' history of dividend growth

I was interested in your comments about companies which have a long record of paying dividends. It is maybe worth mentioning that a good number of UK registered investment trusts have long records of increasing dividends year by year. They tend to have reserves which can be used to bolster pay outs in years when dividend income comes under pressure. Regards from Scotland

 

Eoin Treacy's view

Thank you for your kind email and this reminder that Scotland has a long history of investments that concentrate on dividends. It took several hours today, but I was finally able to compile a reasonably complete list of UK listed investment trusts with admirable records of dividend increases. It turns out there is no easy way to compile the data so I did the grunt work of eyeballing the dividend histories of all 145 trusts with histories of dividend growth.

As far as I can see there are only two which have never cut their dividend in 31 years of history. Three have not cut their dividend in at least 28 years and three more have maintained that feat for more than 20 years.

 

'The common enemy'

Thanks to a subscriber for this credit focused report from Robeco which may be of interest. Here is a section:

 

Eoin Treacy's view

A link to the full report is posted in the Subscriber's Area.

Corporate defaults are inevitable considering the leverage in the system and the sudden disappearance of revenue for many companies. Where companies had borrowed heavily to fund acquisitions or buybacks, they now have to make debt payments with no. or much reduced, incoming revenue. That is an obvious problem particularly affecting some of the most indebted tourist, auto and aeronautics companies. The biggest challenge for banks will be in how exposed they are to small companies on a local level because many are now in dire financial straits.

 

Copper Rises on China, Trimming Big Quarterly Slump

This article from Bloomberg news may be of interest. Here is a section:

Copper climbed as a strong rebound in Chinese manufacturing bolstered the outlook for demand, trimming the industrial metal’s biggest quarterly drop since 2011.

China’s official purchasing managers’ index rose this month, up from a record low in February, signaling the world’s second-largest economy is restarting. While the outlook remains uncertain as the country faces a growing threat from slumping external demand, production cuts at major mines around the world are shoring up sentiment for copper.

The metal extended gains after President Donald Trump called on Congress to provide $2 trillion for infrastructure spending in the U.S.

 

Eoin Treacy's view

On a day when Wall Street pulled back on book squaring at the end of the quarter copper prices were quite firm. China’s reported economic activity has been strengthening as the economy starts back up and commodity investors are expecting significant infrastructure development as some of the more traditional levers of growth are leaned on.

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