For much of this year, copper has been one of the best-performing commodities as highlighted by a year-to-date gain of almost 17% for the iPath Bloomberg Copper Subindex Total Return ETN (NYSEArca: JJC).
However, some commodities market observers are concerned the red metal is starting to cool off. The could be right. Over the past week, JJC is lower by about 3% and the popular copper exchange traded note recently slipped below its 20-day moving average.
“In fact, copper just logged two straight weeks of declines; prior to that, the metal often seen as a rough gauge of global economic growth notched eight straight weeks of gains,” reports CNBC. “Investors ought to keep an eye on Chinese economic growth, Streible said. China is one of the world’s largest consumers of the industrial metal, and its prices can be vulnerable to economic reports out of the country.”
Similar to index-based exchange traded funds, ETNs also track some sort of index as part of their investment strategy. However, an exchange traded note, like the name implies, is a type of debt note that trades on an exchange. Additionally, the underwriting bank that issues ETN shares may choose to stop share creations.