Inflation Roils Equities and Equities-Copper Relative Performance

By Blu Putnam, Chief Economist
Erik Norland, Senior Economist
CME Group

Conflicted Sentiment in Equities

• ​​​​​​Sentiment in equities is conflicted amid growing inflation debate.
• Expansionary fiscal, monetary policies fueling inflation concerns.
• Nasdaq growth stocks more impacted than Dow-listed companies.
• Bonds signal long-term rates might not far exceed Fed’s 2% target.

Will Copper Outperform Equities?

• U.S. equities-copper closely tracked each other over past 16 months.
• S&P 500 has risen 30% from pre-pandemic levels, copper is up 60%.
• S&P 500 and copper have outperformed each other over time.
• Seven factors that could drive the performance of equities-copper.