The stock price of Freeport-McMoRan (NYSE: FCX) one of the largest producers of copper, has declined by almost 12% over the last week (five trading days) and remains down by 2% over the last month. This compares to the S&P 500 which remains down by about 3% over the last week and by about 5% over the past month. Copper prices have declined by about 7% over the past week after factory output in China – the world’s largest copper consumer – declined for the second straight month. Moreover, copper prices are also down from a high of about $4.86/lb in early March 2022 to about $3.40/lb currently, due to concerns about the global economy and the U.S. Federal Reserve’s plans to continue with its interest rate hikes to fight inflation. The construction and electrical applications sectors, which are key copper consumers, typically see activity cool off during downturns and this could further impact demand and pricing for the metal. Although the long-term demand for copper is poised to rise, driven by demand from the electric vehicles and renewables space, the near-term picture appears tough and this has been weighing on Freeport stock.
However, now that FCX stock has seen a decline of about 12% over the last week, will it continue its downward trajectory in the near term, or is a rally imminent? Going by historical performance, there is a roughly equal chance of a decline in FCX stock over the next week. Out of 116 instances in the last ten years that FCX stock saw a twenty-one-day decline of 12% or more, 57 of them resulted in FCX stock rising over the subsequent week (five trading days). This historical pattern reflects 57 out of 116, or about 49% chance of a rise in FCX stock over the coming week, implying a neutral near-term outlook for the stock. See our analysis on Freeport-McMoRan Stock Chance of A Rise for more details.
Calculation of ‘Event Probability’ and ‘Chance of Rise’ using last ten years data
- After moving -12% or more over five days, the stock rose in the next five days on 49% of the occasions.
- After moving -7% or more over ten days, the stock rose in the next ten days on 57% of the occasions
- After moving -2% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 48% of the occasions.
- Copper Prices Have Recovered A Bit. Is Freeport Stock Worth A Look?
- Lower Copper Prices Will Weigh On Freeport’s Q3 Results
- Freeport Stock Falls Further, But It May Be Time To Buy
- Will Freeport Stock Fall Further?
- With Copper Prices Falling, What’s Next For Freeport Stock?
- Why did Freeport-McMoRan Stock Lose 30% In Value?
This pattern suggests that FCX stock is unlikely to see major gains in the near term.
With inflation rising and the Fed raising interest rates, Freeport has fallen 32% this year. Can it drop more? See how low can Freeport stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.
|S&P 500 Return||-1%||-18%||75%|
|Trefis Multi-Strategy Portfolio||-2%||-17%||228%|
 Month-to-date and year-to-date as of 9/6/2022
 Cumulative total returns since the end of 2016