Why Shares of Freeport-McMoRan Lost 10% This Week
Shares in copper miner Freeport-McMoRan (NYSE: FCX) declined 10.4% in the week as of the close of trading on Thursday. The move reflects the ongoing sell-off in commodity-related stocks as the market prices in slower economic growth, due to the Federal Reserve hiking interest rates. As such, economically sensitive commodities like copper have sold off, along with the the miners that produce them, like Freeport-McMoRan.
A fair amount of speculative money has also flown out of the "buy inflation plays" trade (such as buying into copper), which has exacerbated the volatility of price movements.
Whereas earlier in the year, traders flocked to buying copper on fears of near-term supply shortages in the face of ongoing demand, investors are now worried about slower demand due to slower economic growth. That's a pretty reasonable assumption to make, given that the price of copper spiked to about $4.90 per pound in the spring from about $4.30 at the start of the year, only to fall to about $3.20 at the time of writing.
Source Fool.com
