What’s Driving Freeport-McMoRan This Season?
What's Driving Freeport-McMoRan This Season? What's driving Freeport-McMoRan? Freeport-McMoRan (FCX) closed at £9.55 on March 11, which was roughly flat from the previous day's closing.
The stock has been flirting around with the psychologically crucial price level of £10 for the last few trading sessions. It's been a remarkable year for Freeport-McMoRan. At the beginning of the year, not many expected that Freeport would trade near £10 price levels.
However, Freeport has been defying all pessimism in the commodity space (GSG) and moved to higher price levels. Even downgrades by several brokerage firms have failed to deter Freeport's rally.
Risk-on rally Freeport has risen more than 45% since the beginning of the year.
The "risk-on" sentiment has boosted other copper producers also as can be seen in the graph above. Glencore (GLNCY) and Teck Resources (TCK) are trading with year-to-date gains of 54% and 93%, respectively. Southern Copper (SCCO) is trading with YTD gains of a modest 5%.
The current rally is a welcome break for Freeport investors, who have seen their investment value dwindle over the last couple of years. Last year, Freeport lost more than 70% of its market capitalization. Series overview
Having said that, Freeport's sharp bounce back does raise some questions about the sustainability of the rally. In the course of this series, we'll look at the different factors that are driving Freeport's stock price higher. Then we'll explore how these factors could shape up this spring and beyond.
Let's begin by exploring whether Freeport's rebound is a short-covering rally.
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References
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