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Bank Earnings, Michigan Consumer Sentiment

Bank Earnings, Michigan Consumer Sentiment

Commodities are rallying. The inflation trade?

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Friday, April 12. The Bottom Line segment of today’s podcast starts at (3:46) for listeners who want to skip ahead.

State of Play

Stocks advanced yesterday, recovering basically the ground lost on Wednesday, after producer prices came in a little softer than anticipated. As we look at our board of indicators at 0640, there is a rally in commoditiesland to observe:

  • Higher prices across the board for commodities. WTI crude oil is up >1% to trade north of $86/barrel. Copper is up 2%. Gold and silver are moving higher, silver to the tune of 3.5%. It’s not immediately clear what is causing this other than buying by central banks and the safe-have trade;

  • Stock index futures are down a bit, with the Nasdaq off 0.4% and S&P 500 down 0.2%;

  • Bonds are seeing some bids. The 2-year yield is down 4 basis points to 4.92% whilst the 10-year is down 4bps to 4.54% (yields move inversely to prices).

Today’s Known Events

Earnings season is officially upon us. Several major banks and financial institutions report before the open today:

  • Blackrock (BLK 0.00%↑) just beat top- and bottom-line expectations and importantly reported faster growth in investment advisory fees than anticipated. That stock is moving higher in the pre-market;

  • JPMorgan Chase (JPM 0.00%↑), Wells Fargo (WFC 0.00%↑), and Citigroup C 0.00%↑ are due intermittently;

  • Less widely followed are State Street (STT 0.00%↑) and Progressive (PGR 0.00%↑).

We also get the first reading of the Michigan Consumer Sentiment survey, out at 1000. Economists who were surveyed expect the number to print at 79.0, slightly below the 79.4 recorded last month. There are figures on inflation expectations too that unfortunately do not have an economist estimate.

The Bottom Line©️

So after all the movement this week the Nasdaq is up 1.2% over the last seven days. The rally was most pronounced in tech and AI chip names yesterday. The S&P is flat on the week.

Like we said yesterday, there is still risk appetite out there. It may still be for flashy things like tech and crypto and less for consumer staples and the like (much less bank stocks), but it is there. Although judging by commodities markets overnight, it is also being seen on that front.

That may in fact what is driving this commodities rally: inflation. It would certainly make sense for gold to be rallying on that. For the other commodities — specifically copper — to be going along means there are also expectations of continued economic growth to fuel demand for said raw materials.


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The daily podcast discusses the major market activity and economic data release schedule for the day ahead, with a contrarian bent. Also includes regular podcast episodes a day (or more) early and without ads or announcements.