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While the equity markets keep chugging along, there have been some truly spectacular/peculiar moves over the last several weeks. It started with the Nikkei in early August when it plunged over 10% in a single day.  Over the last several days, we’ve seen extraordinary moves in the opposite direction in China. Just yesterday, even as China had its best day in over 15 years, the Nikkei fell more than 4%.  As we noted on X, in less than two months now, the Nikkei has seen its two largest days of underperformance relative to the Shanghai CSI 300 dating back to when China joined the WTO in late 2001.

The crazy moves haven’t been just confined to equities either. On the heels of the big run in Chinese equities on Monday, copper prices got caught in the current with copper surging over 4% in early trading. Throughout most of the trading day, though, copper prices steadily gave up the gains finishing down over 1%.

Even for a commodity like copper that type of intraday reversal is uncommon. Since 1990, it’s only occurred six other times. It happened four times during the Financial Crisis in Q4 of 2008, and the only two other times were in June 2006 and November 2016 just after Trump won the 2016 election. As for how copper performed following the prior reversals, performance was mixed. In the four occurrences during the Financial Crisis, copper was up over 30% six months later each time, but in the six months after the two non-financial crisis periods, it was lower both times. Forward returns were trendless, but that doesn’t make the volatility any easier to stomach.

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