No need to chase the Bear market rally
We know that a number of materials stocks have bounced strongly off recent lows over the past month. But we counsel being selective about which stocks you chase higher. We certainly wouldn’t suggest chasing those segments leveraged to the LME given the continuing weak macro outlook. We note that global base metal inventories are at critical levels in some cases but we also note that the market seemed to ignore weak macro data in August and, while we think China has troughed and the US may only undergo a weak recession, we are VERY worried about the Eurozone and we...