Oil, steel, copper and the recession

One of our independent research houses had this graph in their daily newsletter today in which they contrasted plunging oil to surging steel manufacturing stock prices, making the case that looking at oil prices you'd expect the global economy to just grind to a halt while steel manufacturing prices (up 50% in December) tell a different story. I wrote back with the following answer and graph:

"Nicolas,

re: the graph that contrasts oil and steel in today's checking the boxes: I think it's likely more appropriate to use commodity prices for steel rather than steel manufacturing companies. We still witness the same divergence -- steel is up while oil is down. On the other hand, it's not as if this signal is unanimous. Copper, for example, which is also used in pretty much everything is down in lockstep with oil. What do you think?"

I'll let you know if I hear back.

at 4:30

Nicolas wrote back and said that he'd forward it to the other members of the team. I think he's just their sales guy. Anyways, I responded:

"Thanks Nicolas. I'm talking about this with a colleague [JTR] and we're thinking that
steel is likely surging b/c of the infrastructure buildout in the US and China
whereas copper may be used more in electronics than roads and bridges. Do let
me know what the rest of the team thinks, I'll be very interested."