Wall Street awaits Alcoa earnings
Jeremy Hobson: After the markets close today, everybody on Wall Street will be waiting to hear from the big aluminum producer Alcoa. The company will tell us how much they earned last quarter and what they’re expecting in the next three months.
But as Marketplace’s David Gura reports, Alcoa is likely to give us clues about a lot more than metal.
David Gura: Alcoa is what’s called a bellwether. It gives investors a sense of how other companies are doing.
Gayle Berry: It is a good overall indicator of industrial activity.
Gayle Berry is a metals analyst with Barclays, and she says that’s because aluminum is used in so many sectors.
Berry: Everything from transportation to packaging, building and construction.
Right now, demand for aluminum is down. And so are prices — especially in Europe and Asia.
Berry: We need to see an improvement in global economic growth.
Nikos Kavalis is a commodities strategist with RBC Capital Markets, and he says the economic crisis in Europe has made investors skittish. They’re less inclined to buy what he calls “risky assets.”
Nikos Kavalis: Among these, commodities and base metals in particular have been hit quite hard.
Alcoa is trying to cut back, to curb production, hoping that’ll bring its costs down until the market improves. We’ll see how that’s affected the company’s bottom line later today.
In Washington, I’m David Gura, for Marketplace.
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