Yahoo Finance The Fed, Goldman, and More: How Freeport Is Getting Battered
The Fed, Goldman, and More: How Freeport Is Getting Battered
Freeport-McMoRan
Freeport-McMoRan (FCX) closed at $4.89 on February 11, 2016, losing 1.8% from its previous day’s closing price. With yesterday’s fall, Freeport has lost 15% since the beginning of this week. However, it still continues to trade comfortably above its 52-week low of $3.52.
Freeport-McMoRan’s (FCX) upward momentum in late January and early February helped the stock bounce back more than 50% from its January lows. However, the rally started losing steam this week. We discussed the various factors driving Freeport’s downward price action in our series Why Freeport-McMoRan’s Nice Little Rally is Losing Steam.
Recent drivers
In a nutshell, a weaker dollar boosted copper prices, and energy prices gained on the possibility of some sort of an arrangement between OPEC and non-OPEC countries. To add to that, Freeport-McMoRan entered into oversold territory last month. Even a little positive news flow added a spark to the fire, triggering a rally in Freeport’s stock.
We also received Southern Copper’s (SCCO) 4Q15 financial results and Glencore’s 4Q15 production report on February 10 and February 11, respectively. While Glencore (GLNCY) is looking at cutting its copper production in 2016, SCCO expects its copper production to rise 21% year-over-year in 2016. Rio Tinto (RIO) also expects its copper production to increase in 2016.
What now?
There have been some very interesting developments over the last couple of days. The Federal Reserve Chair, Janet Yellen, testified before Congress in the semiannual monetary policy report. Also, Goldman Sachs came out with revised price targets for base metals (DBB).
In the course of this series, we’ll see how these events have impacted Freeport-McMoRan (FCX). Let’s begin by looking at the recent movement in copper prices in the next part of this series.
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