Mining shares ride the unicorn as futures crash

Tuesday 31 March 2015

Never say that markets are rational. Never! Today big iron share prices are flying northward mounted on unicorns as the price of their only product plunges southward with no suggestion of anything to turn it around. BHP is up 3%, RIO 2% and FMG 1.3%. To the indexes:

FMG has gazumped its way back into a negative correlation with its only product, BHP is at a record wide with RIO only a hair’s breadth from the same:

One should quickly pause to consider what will happen if FMG fails to pull off a deal with China. Apparently RIO began its buyback today so it’s a shame it won’t have any money in a couple more months!

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.