This past week was a doozy for the markets.
For the third consecutive time this year, the Federal Reserve raised its effective federal funds rate by three-quarters of a percentage point to a range of 3%–3.25%, the highest it's been since early 2008.
The EFFR is the rate that banks charge one another for overnight lending, and it has a ripple effect on the cost of borrowing for things like homes, cars and credit cards.
And the Fed signaled there will be more interest rate increases during the coming months.
The aggressive hikes are an attempt to tackle inflation, which is sitting at 8.3% — a lot higher than the Fed's 2% target, which is projected to be reached in 2025.
When might we see rate cuts? That's not foreseen until 2024.
As stocks tumble in light of the Fed's move, we're seeing that the market has a renewed soft spot for a particular hard asset: copper.
Copper is the best transmitter of electricity among all the base metals and has the nickname Dr. Copper because its price acts as a gauge for the health of the global economy.
Senior Analyst Sean Brodrick says rising interest in copper is "one of the more bullish things that I've seen for the global economy, as of late."
Sean is a commodities expert, with boots-on-the-ground experience at mines across the world.
His investment strategies play to commodity cycles in his premium trading services, Resource Trader and Supercycle Investor.
They are also used in his monthly service, Wealth Megatrends, where investors are getting paid substantial dividend yields in nearly all positions.
Members of those services are sitting on open gains of 75%, 21% and 15%.
Sean says there are several reasons why we're seeing short-term and long-term interest in copper surge.
For starters, Chinese imports of copper are currently up 8.1%.
A new report from S&P Global projects global copper demand will nearly double over the next decade, from 25 million metric tons today to about 50 million metric tons by 2035.
In today's special four-minute video segment, Sean discusses how demand will continue to grow as major technologies — some of which has yet to be developed — roll out.
He says innovation will create tremendous opportunities for investors:
There will be large-scale deployment of technologies which include electric vehicles, infrastructure for charging stations, solar PV, wind and batteries.
EVs can use up to 3.5 times the amount of copper compared to an internal combustion engine.
In this insightful video, Sean and I explore:
- Two giant industries driving copper's momentum.
- An exchange-traded fund that pays a 3.67% dividend yield.
- An ETF that trades more than 1.5 million shares a day, giving broad exposure to an industry.
- An important metric for copper.
- The impact of the Inflation Reduction Act.
And much more.
The information in this short segment couldn't be timelier. Just go to the video box above to watch it now.
Happy investing!
Jessica Borg
Financial News Anchor
Weiss Ratings
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