Copper prices jumped 5% on Apr. 13, continuing a four-week rally. The metal—an economic bellwether because it is used for wiring in home appliances, buildings, and telecom networks—has an average price of $2.14 per pound, well below its 2007 high of $3.07. Josephine Jiménez, manager of the Victoria 1522 Fund, which focuses on emerging markets, expects prices to keep rising since production capacity is limited and demand is still robust from China, the world's biggest copper consumer. Plus, copper is a play on inflation since it's used for minting coins, says Jiménez—"and there is a serious shortage of coins." The purest copper play: The iPath DJ AIG Copper Total Return Sub-Index (JJC) exchange-traded note, which holds futures contracts, says Matt Hougan, editor of IndexUniverse.com. (Exchange traded funds—ETFs—typically mimic market indexes; ETNs are more like bonds and have credit risk.) Another option: the PowerShares DB Base Metals (DBB) ETF, with 40% in copper.
Box Office Buys?
While the economic news continues to be grim, things are looking up for Hollywood. As in the Great Depression, consumers are looking to the local cinema for a lift. Led by Hannah Montana: The Movie from Disney (DIS), box office receipts for Easter weekend were up 61% from the same period last year. Through Apr. 13, box office numbers for 2009 are up 14% from a year ago. That's good for the studios, but even better for theater operators Regal Entertainment (RGC), Cinemark Holdings (CNK), and Carmike Cinemas (CKEK), which collect about 45% of receipts, says Steve Birenberg, president of Northlake Capital Management.
Stocks of theater operators jumped after solid first-quarter box office results, but Birenberg says continued box office strength will prompt analysts to hike profit estimates in the short term. Over the long run, investors are reassessing moviegoing trends. "People assumed for years that home theater and DVDs were killing off the business," says Birenberg. "Now we're seeing that's not true, and [the business is] much more stable and sustainable than investors thought."
After MGM Mirage (MGM) reached an agreement with lenders on Apr. 13 that avoided a cutoff in credit, the casino operator's shares rose 18%. The spike can be attributed to short-covering, as traders who bet on MGM's imminent insolvency rushed to cover positions. While traders are still betting MGM won't resolve all its debt woes soon, Union Gaming Group's Bill Lerner notes it has billions in collateral to back any amended loan and is trying to sell casinos to raise cash. And with MGM Nevada's largest employer, Washington could pressure lenders to renegotiate. If that happens, Lerner says, expect another price spike.