The Markets

Sometimes, less bad is actually good.

Investors are clinging to any signs of hope that the economy, if not actually turning the corner, at least has the corner in view now. A slew of economic reports released last week hinted at some possible good news. Out of 12 reports, seven were better than expected and two were at expectations, while only three were worse than expected, according to Bespoke Investment Group. Wall Street has been anxious to see this type of (relatively) good news and investors responded by sending the stock market to a healthy gain last week.

In another sign of good news, the price of a pound of copper rose to $1.86 at one point last week, up from just $1.30 in December 2008. Copper has earned the nickname “Dr. Copper” due to its past ability to predict booms and busts, according to MarketWatch. The fact that copper is heavily used in building and manufacturing helps explain its supposed forecasting ability. Russell Napier, author of the book, Anatomy of the Bear, is also a big believer in copper’s predictive powers. He wrote, “Of all the commodities, the change in the trend of the price of copper has been a particularly accurate signal of better equity prices.”

These initial shards of good news helped underpin the market’s recent rocket rise. Since reaching its cyclical closing low of 676 on March 9, the S&P 500 has risen just over 20%, according to data from Yahoo! Finance. That’s a remarkable recovery in just 18 days. Technically, it means we’re in a new bull market using the traditional definition of a 20% gain from a previous low. Technicalities aside, nobody is ready to uncork the bubbly.

We’re not kidding ourselves by thinking that all is well on the road to recovery in the economy and the financial markets. It’s just nice to see a few of the speed bumps flattening out.