In the latest Market on Close livestream, viewer Richard asked a sharp question:
“ITB — the construction index — appears to be the first leg to drop, showing weakness in the overall economy. Is this just a retracement or a sign of things to come?”
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John Rowland, CMT, didn’t hesitate to widen the lens by citing two classic barometers of global growth: copper and crude oil.
“If Dr. Copper is the measuring stick for economic activity,” John explained, “then crude oil is the canary in the coal mine for recession.”
Why Copper and Oil Matter So Much
Both commodities are historically leading indicators of the business cycle.
Copper (aka “Dr. Copper”) earns its nickname because it’s used in a vast array of industrial applications — from homebuilding and manufacturing to power grids and EVs. When copper prices fall, it often suggests slowing industrial demand.
Crude oil (CLX25), on the other hand, reflects the heartbeat of global energy consumption. Rising oil prices can indicate economic expansion, while sharp declines often point to weakening demand or recession fears.
As of last Friday’s broadcast, both were flashing yellow lights:
“Oil dropped about $2.50 today,” John said. “That’s significant. We’re seeing a fall in crude oil prices — and that can be a signal that growth expectations are softening.”
Is Construction Another Key Domino to Fall?
Viewer Richard’s observation about the iShares U.S. Home Construction ETF (ITB) fits right into the broader macro puzzle. Housing is often one of the first sectors to slow when interest rates bite or consumer sentiment turns cautious.
Pair that with weakness in copper (HGZ25) and crude, and the data starts to “rhyme” with early cycle economic slowdowns seen in past decades.
What Traders and Investors Should Watch Next
First, check out John Rowland’s deep dive on the broader context of Friday’s market sell-off. Then, track these early warning signals on Barchart:
Track the ITB Construction ETF
- View ITB Options Flow
- Check Barchart Opinion and key moving averages to spot trend changes
Monitor Copper Futures
- Copper Futures Trading Guide
- Check Technical Analysis and Seasonal Returns for signs of contracting demand
Watch Crude Oil Futures
- Crude Oil Futures Trading Guide
- Check Trader’s Cheat Sheet to compare technical levels for potential breakdowns.
Check Leading Indicators
Government data is still on ice with the current shutdown… but once we open back up, use Barchart’s Economic Calendar to track upcoming ISM Manufacturing, Housing Starts, and GDP data releases that can confirm (or disprove) the slowdown narrative
The Bigger Picture
Copper’s slide + crude’s dip + construction’s rollover = a market that may be telegraphing slower growth.
Still, Rowland reminds traders not to panic — but to pay attention:
“These aren’t panic signals. They’re observation points. When the commodities that power growth start to slow, it’s time to start watching where capital is rotating.”
Whether that means re-balancing into defensive sectors, tightening stops, or scanning for undervalued opportunities — the charts and data on Barchart can help you stay ahead of the curve.
Watch John’s quick breakdown of warning signs →
- Stream the full Market on Close episode >>
- Start tracking Copper and Crude Oil Futures on Barchart
