Copper prices hit an all time high

While everyone was focusing on the S&P 500 recouping its losses from the Egypt-driven sell-off on Tuesday, the most telling breakout was happening in the commodity pits with copper. The metal surged 2 percent to a NYMEX record of $4.54 a pound.

"When it was around $4 eight weeks ago, I suggested that it might start behaving like a rare earth metal with a vertical ascent in its price causing it to maybe double over the next 18-24 months," said Ed Yardeni, President of Yardeni Research. "Professor Copper is among the economic forecasters with the best track record. The Good Professor isn’t fazed by all the commotion in the Middle East."

Yardeni, a widely followed strategist and economist who held these positions at Deutsche Bank and Prudential over his 25 years on Wall Street, looks to copper as the ultimate economic indicator because of its industrial use. While some economic data around the world can be fudged (especially from China), the price of ‘Dr. Copper’ doesn’t lie, the theory goes.

The metal’s aggressive recovery from its low this year confirmed, before stocks, that the global recovery would be unfazed by Egypt’s turmoil. Yesterday the Institute of Supply Management’s index of manufacturing hit its highest level in seven years. Similar measures from Europe and Asia recently have also confirmed copper’s comeback this week. China is the world’s biggest consumer of copper.

Industrial stocks, which Yardeni is overweight, are confirming the global recovery is intact as well with shares of General Electric, CSX and Deere up more than 10 percent amid better-than-expected earnings and forecasts. Analysts have ratcheted up their profit expectations for companies in this group more than any other sector during this earnings season, according to data crunched by Bespoke Investment Group.

"The jump in food and fuel commodity prices since last summer has created a more immediate inflation problem for China and other emerging economies than for the developed economies," said Yardeni in today’s note. "However, it is very unlikely that central bankers in the emerging economies will tighten to the extent that economic growth will be impacted much. This is especially so now that more of them need to worry about social and political instability. In other words, they will talk tough and maybe tighten some more, but they will learn to live with the inflationary consequences of rising commodity prices."

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John Melloy is the Executive Producer of Fast Money. Before joining CNBC, he was an editor for Bloomberg News, overseeing the U.S. Stock Market coverage team.