"The history of Eureka lies in its future." - Lambert Molinelli, 1878


The author/editor of the Eureka Miner owns common shares of local mining stocks, General Moly (GMO) and Newmont Mining (NEM); together with benchmark miner Freeport-McMoRan (FCX). Please do your own research, markets can turn on you faster than a feral cat.

Thursday, May 14, 2009

Copper Drops Below $2

Morning Miners!

It is 6:25 am and I wish the ole Colonel had better news on copper, our old standard bearer for global recovery. It has reversed lately and dropped below 2-bucks this morning in early trading. Let's check the Eureka Miner's Million Dollar Grubstake to see what it tells us. For new readers, the Grubstake is a portfolio of twelve stocks that directly or indirectly influence the future of mining in Eureka County. You can see the makeup of the Grubstake by checking the blog archive in the right column of this report. It should be a pretty good barometer of fair weather or storms ahead in the economic recovery.

Gadzooks! We've lost $67,440.27 in the past three days, that's down 6.7% from Friday's close. Thank heavens this is only monopoly money buckaroos! What in tarnation is going on? Here's what the pointy-shoed Wall Street boys are saying this morning:

"Oil prices fell to below $57 a barrel after a new [International Energy Agency or IEA] study predicted demand would fall by 3% this year and as weak U.S. retail sales and housing figures dampened optimism about an economic turnaround." (WSJ, 5/14/09)

Does the Colonel believe they are right? Heck, I'm an optimist. The water is always a little cold when you jump in for a swim. This recovery will recover, it just might take a little longer than we'd like. I will put my money where my mouth is on oil prices and put down my first bearish beer bet on that overvalued commodity:

Oil sees $52 before $62 on or before 5/29/09

For the new folks, The Colonel's Beer Derby is a series of beer bets on commodity prices (also in the right column of the blog).

Enough of all this gloom and dooming, let's walk the walk:

Oil is down $1.00 at $57.00 (June contract). Gold is down $0.7 to $925.2 (June contract); Silver is slipped below $14 at $13.905; Copper is retreating 0.0430 to $1.98.75 (July contract); Molybdenum has a nice pop to $10.10.

The DOW is up 10 points to 8294.92; the S&P 500, up 4.95 points to 888.87. The
miners are down today:

Barrick (ABX) $34.22 down 0.38%
Newmont (NEM) $42.75 down 0.49%
General Moly (Eureka Moly, LLC) (GMO) $1.46 down 7.01%
Freeport McMoran (FCX) $45.02 down 2.15% (a bellwether mining stock spanning gold, copper & molybdenum)

Steel stocks are mixed (a "tell" for General Moly):

Nucor (NUE) $39.28 down 0.76% - domestic steel manufacturing
ArcelorMittal (MT) $25.00 up 2.42% - global steel producer
POSCO (PKX) $79.49 down 1.94%- South Korean integrated steel producer

The Eureka Miner's Grubstake Portfolio is down 0.90%

Looks like another sunny day outside, let's enjoy the weather and forget the markets!


Colonel Possum

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