This is a syndicated repost published with the permission of Money Morning. To view original, click here. Opinions herein are not those of the Wall Street…
Why I Cancelled Everything in Germany and Took the Next Flight to Dubai – Kent Moors – Money Morning
This is a syndicated repost published with the permission of Money Morning. To view original, click here. Opinions herein are not those of the Wall Street…
Tags: energy price, Energy Prices, energy prices 2013, oil price, Oil Prices, oil prices 2013
Consumer prices are stabilizing… Recently, oil prices have tumbled and core inflation — which excludes volatile food and energy prices — has flattened out, with…
Over the last twelve months mining stocks have substantially underperformed the market.
In fact, the Standard and Poor’s Metals and Mining select industry index (INDEXSP: SPSIMM) is off 35% in the past year, while the overall market is up 2.5%.
Admittedly commodities prices are down, but only by 14% in the last year. Meanwhile, the cost of some commodities — notably gold prices — are much higher than they were.
Given the buoyancy of global monetary policy, this is surprising. For investors, the big question is: will the downturn in mining stocks last?
It truth, though, when you look more closely at operating numbers, the weakness in commodity shares is easier to explain.
Mining Stocks: Breaking Down Barrick Gold
For example, Barrick Gold (NYSE:ABX), a gold and copper miner that is generally well regarded, posted first quarter earnings which were up just 3% from the previous year. That was a surprisingly weak performance given that its gold sales price was up 22% — even though its copper price realized was down 11%.
However, gold cash mining costs were up 25% and copper cash mining costs were up a startling 66%. So even though copper production and sales were also up sharply, margins on those sales were down 43%.
In other words, even though Barrick enjoyed a favorable operating quarter with good prices, mining costs for both gold and copper were up so sharply that Barrick enjoyed little benefit from this success.
The same picture is clearly seen around the mining sector, and indeed in the related energy sector.
Strong sales prices over the last few years have had two effects.
Novinite.comU.S. Consumer-Price Index Unchanged, Core Rate Climbs 0.2%BloombergA measure of the US cost of living was unchanged in April, restrained by a drop in energy prices and supporting the view of some Federal Reserve policy makers that inflation…
WASHINGTON – The recovery continued to firm in the The recovery continued to firm in the final quarter of last year, and labor market conditions…
If you have read The Wall Street Examiner you have read Lee Adler comparing the trading pattern we are under to 1973: where seasonal “go…
TBAC sees slightly reduced financing needs for remainder of Q4. I call bullshit. More in the Wall Street Examiner Professional Edition Treasury update tomorrow.
You are subscribed to All Treasury Press Releases for U.S. Department of the Treasury. T…
May 16, 2011
Here’s a chart based on the weekly gasoline price update from the Department of Energy with an overlay of West Texas Crude (WTIC). Gasoline prices at the pump are virtually unchanged from last week: regular is fractionally lower, premiu…