The metals and mining space has seen a reversal of fortune this year. Metals prices plunged to multiyear lows in 2015 and 2016. However, China’s stimulus helped fuel a rally in commodity prices.
Supply curtailments announced by companies such as Freeport-McMoRan (FCX) and Glencore also helped copper markets.
President Donald Trump’s election as the US president fueled another buying spree in metals in 2016. President Trump’s supposedly business-friendly economic policies and infrastructure boost were expected to provide a leg up to the US economy (SPY). The looming supply deficit predicted by most market observers also supported copper prices.
Copper rose to a four-year high earlier this year. However, trade war fears and concerns about the Chinese economy have taken a toll on metal prices, with copper being no exception. Copper miners, including Southern Copper (SCCO) and Antofagasta (ANTO), have followed copper down. However, diversified miners such as Vale (VALE) are trading with gains this year amid the strength in seaborne iron ore prices.
The third-quarter earnings season is almost over, and most copper miners have released their third-quarter earnings and production results. In this series, we’ll see how analysts are rating copper miners amid lower copper prices. We’ll also look at leading copper miners’ third-quarter earnings and operational data.
Let’s begin by analyzing Freeport’s ratings and target prices.
Antofagasta (ANTO) has received “strong buy” ratings from seven analysts, while five have given it “buy” ratings or some equivalent.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.