Why Shares in Freeport-McMoRan Rose Sharply Today
Shares in copper miner Freeport-McMoRan (NYSE: FCX) were up by around 7% as of 10 a.m. ET today. The move comes after some softer-than-expected inflation data soothed the market's fears over the severity of interest rate hikes needed to cool inflation. This could immediately be seen in the decline in the 10-year U.S. Treasury rate to around 3.8% from about 4.1% at the start of the day. Lower interest rates usually mean higher growth.
The move helps to highlight one of the three big and interconnected drivers of global copper demand and, in turn, Freeport-McMoRan's earnings. For reference, at the time of writing, the price of copper was up to $3.81 per pound compared to $3.43 at the start of November.
The three factors driving marginal demand for copper are electrification in the economy (including demand for copper wiring in electric vehicles, charging networks, storage, renewable energy, smart buildings, etc.), demand coming from China's industrialization, and overall demand coming from cyclical growth in the economy.
Source Fool.com
