6-Chart Saturday (2/20/21)

By Charlie Bilello

20 Feb 2021

6 charts from the past week that tell an interesting story in markets and investing…

1. Dr. Copper’s Comeback

Copper closed at its highest level in over 9 years, more than doubling from its low last March. The signs of rising inflation can found almost everywhere.

Freeport-McMoRan ($FCX), a leading producer of Copper, continues to be a momentum leader, with its shares more than tripling over the past year.

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2. There’s a New Gold in Town

Speaking of inflation, investors continue to flock to Bitcoin as an alternative to fiat money that is being debased at a record pace. The crypto asset hit $57,000 this week, nearly doubling since the start of the year.

What about Gold? The yellow metal is actually down 6% year-to-date with investors increasingly viewing Bitcoin as the new Gold.

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3. The Worst Year for Bonds in History?

Bond yields continued their upward trajectory this week with the 30-year Treasury yield hitting 2.14%, more than doubling from its all-time low last March.

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As bond prices move inversely to interest rates, the Bloomberg Barclays Aggregate Index (broad US bond Index) is down 1.8% to start the year.

It wouldn’t take much more of an increase in rates to make this the worst year for bonds in history (currently -2.9% in 1994).

4. The Road Back to Normal

The road back to normal is finally upon us as the covid-19 numbers are starting to show dramatic declines.

Covid-19 hospitalizations are now down over 54% from their peak on January 6, approaching the highs from last summer.

New covid-19 cases are down 72% from their peak on January 11.

5. Housing Boom 2.0 Continues

Building permits in the US continue to increase at a rapid pace, now at their highest levels since May 2006.

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The combination of record high stimulus and record low mortgage rates has led to a boom in home prices throughout the US, up over 9% on average in the last year alone.

6. The Free Money Effect

The boom in Retail Sales resumed in January with a surge to record highs.

The 6% increase in US retail sales over the prior year is the largest since June 2005…

The lesson: if you give the American consumer free money, they will spend it. And speaking of free money, the 3rd round is expected for many to be the biggest yet.

And that’s it for this week. Thanks for reading.

Have a great weekend everyone!


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