Copper futures are breaking out to new all-time highs. Is this a signal for the whole Base Metals complex?

We think so and here's why.

When Copper leads, the rest of the base metals often follow. 

We've seen this happen in numerous cycles. The last occurrence was in 2020.

This trade is even better when Gold is the first one out of the gate, which is the case this cycle. We discussed it a few weeks ago - be sure to check out that post if you haven't already.

The evidence for a base metals rally has been stacking up recently. Aluminum is shaping up nicely, and we think it could be one of the next to go.

From there, we expect Steel, Nickel, Tin, Zinc, and all of the rest to follow.

This index holds an equally-weighted basket...

The end of the Q1 2025 earnings season is approaching.

Tonight is the last big report. Lululemon $LULU is scheduled to report earnings after the close today, and we're expecting fireworks. Its Q4 2024 earnings reactions (~+16%) was one of the best ever.

The market is expecting the company to report revenues of $3.58B and earnings per share of $5.85.

As we're writing this, the stock is trading at its high of the day (~+3%).

Stay tuned...

For now, let's talk about the earnings reactions from Wednesday.

*Click the image to enlarge it

Cintas $CTAS had the best earnings reaction. They reported revenues of $2.61B versus the $2.60 estimate and earnings per share of $1.13 versus the $1.06 estimate.

Paychex $PAYX had the 2nd-best earnings reaction. They reported in-line revenues and earnings per share of $1.49 versus the $1.48 estimate.

Finally, Dollar Tree $DLTR also had a positive earnings reaction. They reported revenues of $5B versus the $8.24 estimate and earnings per share of $2.29 versus the $2.20 estimate. 

Now, let's dive into...

McCormick & Company $MKC reported earnings on Tuesday.

This is the company that has grown into the leader in all things related to flavor. Their products include Frank's RedHot, Cholula, and much more. 

It's basically impossible to have a kitchen without a McCormick label.

The stock has been a leader in the Consumer Staples sector and has rallied after its last 5 earnings reports. This is one of the longest beat streaks in the S&P 500.

Following the release of its report, the stock opened 5% lower but rallied throughout the day to close nearly flat for the session. It was an epic comeback for the bulls!

What initially spooked the market?

It was all about the guidance. 

The market was expecting the company to announce an upward revision of its forward guidance. Instead, they maintained the current guidance.

Let's talk about what else happened.

*Click the image to enlarge it

As you can see, McCormick reported a double miss. Their revenue was in line, but the EPS number came in 4 cents below the estimate.

There is a significant...