Chart of the Day - Friday, June 26th, 2020
June 26, 2020
Today's Chart of the Day was shared on Twitter by Dan Russo (@DanRusso_CMT). It's a chart of the Copper/Gold ratio over the past four years. This ratio is often used as a proxy for global growth. Copper has been underperforming Gold for more than two years, indicating that we're in a low or no-growth environment. When growth is scarce like this, market participants become more willing to pay a premium for growth. Hence the reason that growth stocks have been aggressively outperforming value stocks in recent years. Dan explains that it would be wise to continue favoring growth over value until this ratio reverses its multi-year downtrend.