Mmmmm, stimulate my package, baby

With a post title like that, discretion
is the greater part of valour

All fun down here, as the likelihood of the Obama stimulating the world is reflected in trading all over the region. Brazil's Bovespa is up 4%, Argentina's Merval up 3% and copper is zooming and dragging PCU, Peru and Chile out of da funk. A special mention is needed for the banks, as fun is being had all over the region in that sector. Here are a few US-traded ADRs as examples:

• Peru's Credicorp (BAP) up 4%, even though it announced a crappy quarter (it was Madoffed to the tune of $45m) after the bell yesterday.

• Brazil's Itau (ITU) up 9%

• Argentina's Grupo Galicia (GGAL) up 12%

• etc (pick your own fave...plenty to choose from)
  

The general effect of the soon-to-be stimulated States on trading has even been strong enough to see Peru's Nuevo Sol currency (PEN) strengthen against the greenback after its surprise (for some at least, hahaha) rate cut last night. Proof, if needed, that the US economy still calls the LatAm tune bigtime.

Base metals rallying again

On the subject of rallies, the Dakar Rally (ex-Paris/Dakar) starts tomorrow.
This edition is being held in Argentina and Chile.
Above is a cool hi-res photo to click on

"I've been down so long, being down don't bother me."

(trad. Blues standard)

Maybe it's just because they were so low they couldn't go no mo' low, but the base metals complex is starting 2009 in fine style. Charts please, maestro!

Copper

Zinc

Lead

Nickel

Again, my eye is caught by Zn. While copper dropped from above $3 to under $1.30, zinc has stuck around all this time at $0.50/lb or so. To me, this points to the "well, it can't go any lower than this, can it?" line of thinking. The rebound in BMs over the last couple of days may well be monetary in its nature and less to do with actual demand (though that Chinese stockpiling news does suddenly spring to mind). Whatever it is, it's welcome.

Now to watch and wait and see if it holds. Betcha the Peru stock market makes headlines this afternoon.

Buying copper stocks at the bell

Just to put it on record.

The Freddie and Fannie news is going down well, by the looks of the futures market, anyway. That makes sense; Wall Street always applauds when the big guys get bailed out and the little guys get screwed....tis the way of the world.

The dollar has rallied bigtime and sits at 79 and bits on the USD. That makes sense in the first phase of a serious rebound, and it's taken the very-short-term shine off the PacRim metals rally last night. I'd expect the dollar to peak and reverse as the real money exits bonds and finds homes in equities. That's when commods will really rally; that's the moment when people will go "hey...recovering USA means they gonna buy more stuff again, dude. The dollar going down, dude. Hey, dat means copper's gonna go up, no?" or something similar.

Anyway, I like boarding trains while they sit at the station and I don't like trying to scramble on once they're moving. Buying FCX, PCU, ARG.to (Amerigo), CS.to (capstone).

Have fun , and DYODD.

UPDATE: Talking of Capstone, this just crossd the wires. This is what I call a very smart business move. Grab onto CS.to with both hands. Click right here to read the whole PR, as it includes important terms and conditions not included in the fist paragraph pasted here.

UPDATE 2: Bot FCX at 74 (this is not a ST trade). Can't get filled on ARG and CS yet. Haven't got round to PCU yet, but as it looks like the early doors euphoria is wearing off, waiting a bit longer might be wise.

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Press Release

Source: Capstone Mining Corp.

Monday September 8, 9:19 am ET

Management Teams to Combine Assets, Skills & Production in a Highly Complementary Transaction

VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Sep 8, 2008 -- Sherwood Copper Corporation (CDNX:SWC.V - News)(CDNX:SWC-DB.V - News) and Capstone Mining Corp. (Toronto:CS.TO - News) have entered into a Letter Agreement to combine, by way of a plan of arrangement or other form of business combination, to create a well-funded, low-cost, growth-oriented, copper company with two producing mines in mining friendly jurisdictions in North America. The two companies have agreed to combine on an "at-market" basis whereby each Sherwood shareholder will receive 1.566 shares of Capstone (based on the 20-day volume weighted average share price of the two companies). The boards of directors of Sherwood and Capstone have unanimously approved the terms of the transaction