SMU Community Chat with Spencer Johnson of StoneX Financial

Guests: Spencer Johnson

Veteran StoneX futures broker Spencer Johnson was the featured speaker on SMU’s latest Community Chat on Wednesday, May 29.

What’s the price? And, more importantly, what’s priced in?

We talked about “What’s the price?” as we often do in these webinars. But we spent more time discussing something more interesting: “What’s priced in?”

The most obvious recent example of something that was not “priced in” was Nucor’s first weekly spot HR price on April 8 at $830 per short ton (st). That shocked a market that had been expecting prices to cycle upward.

We saw something similar happen on May 6, when Nucor posted $760/st. Sheet mills almost never announce a price decrease – and a $65/st cut had not been “priced in.” Once again, the market was caught by surprise.

But the question of “What’s priced in?” is not just about market shocks. It’s also about longer-term assumptions about the supply-demand balance, interest rates, and the strength of the US dollar – to name just a few factors.

Or, put another way, HR futures can be a good window onto everything from steel market news and macroeconomics to geopolitics and human psychology.

Why you should listen

Johnson is in a good position to address these topics because he has worked with every type of market participant to formulate risk management and trading strategies for steel derivatives.

He is in addition one of the longest serving members of the London Metal Exchange’s steel committee.