What's going on?

Alcoa � America�s largest aluminum producer � reported its highest-ever quarterly profit late last week, with the world unable to get enough of the intoxicating metal.

What does this mean?

Yep, we�re talking about aluminum. But the metal�s essential to everything from cans to car parts, which makes Alcoa a bellwether stock: the company’s sprawling business covers all sorts of regions and industries, which means its performance gives us a clue about economic growth as a whole.

This time around, though, global economic growth might�ve given investors a clue about Alcoa�s performance: demand for aluminum � and commodities more broadly � has skyrocketed as the world economy bounces back, and its price has risen 24% this year. Analysts, for their part, shouldn�t have been afraid to dream a little bigger: the company�s second-quarter earnings came in higher than they expected. To top things off, the company raised its shipment guidance for 2021, which should � all else being equal � translate to higher-than-expected revenue for the year overall.

Why should I care?

For markets: Inflation catches up with everyone eventually.

The rising prices of metals has been great for Alcoa�s earnings, sure, but higher raw material and energy prices are bound to weigh on its own profits going forward (tweet this). If the company can successfully offset those higher costs, rising profits should lead to a rising share price. But that�s a big �if�: commodity firms don�t exactly have a good track record of passing on their costs, which might be why Alcoa�s stock didn�t move much on Friday.

The bigger picture: Goldman�s a metalhead.�

Goldman Sachs thinks aluminum still has plenty of potential: the investment bank is predicting the metal�s price will rise another 20% over the next year. But you could say the bank�s more in ore of another metal at the moment: Goldman thinks supply and demand for iron ore will be out of whack until at least 2023, suggesting the commodity�s �bull market� could keep running and running.