Why Copper Is Spooking Traders

The canary in the coal mine? Copper is a proxy for global growth, and traders seem to be getting nervous.

Stock traders who do not normally watch the metals markets have been alerting me for the past two days to the notable decline in copper — down 3 percent today and 6 percent in the last 3 days, to the lowest levels since December.

Metal stocks like Freeport McMoRan have been in an even steeper decent.

What's up? Fears that higher oil prices might trigger a broader global slowdown. You can also throw in rising rates around the world, and concerns about inflation in China and a slowdown there (high speed data equipment maker Finisar and Ciena both talked about slowing demand in China).

Why isn't the broader markets reacting to these concerns? Because the current play is that the rise in oil is temporary. We'll see, but it's clear some elements of the markets are getting nervous.

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