Will ArcelorMittal Stock Continue To See Gains?

-5.20%
Downside
31.45
Market
29.82
Trefis
MT: Arcelor Mittal logo
MT
Arcelor Mittal

ArcelorMittal (NYSE:MT) stock has rallied by close to 13% over the last month (about 21 trading days) considerably outperforming the broader markets, which remained roughly flat over the same period. There have been multiple positive developments for steel stocks in recent weeks. China – the top steel consumer – has ended its zero Covid-19 policy which essentially kept its borders closed for close to three years. The big reopening of the Chinese economy after over two years is expected to result in rising demand, supporting global steel prices. The Federal Reserve has also moderated its pace of interest rate hikes, with inflation easing a bit and this has also helped commodity stocks to an extent. There are also some signs that industrial production in Europe is stabilizing after the energy crisis caused by the Ukraine war and this could be helping MT, which derives over half its revenue from the European market.

Given that MT stock is up 13% over the last month, will it continue its upward trajectory, or is a decline imminent? Going by historical performance, there is a roughly equal chance of a rise or decline in MT stock over the next month.  There were 378 instances in the last 10 years when ArcelorMittal (MT) stock saw a trailing 21-day rise of 13% or more. Out of this, 181 of those instances resulted in MT stock rising over the subsequent one-month period (21 trading days). This historical pattern reflects 181 out of 378, or about a 48% chance of a rise in ArcelorMittal’s stock over the next month. See our analysis on ArcelorMittal Stock Chance of A Rise for more details.

Calculation of ‘Event Probability’ and ‘Chance of Rise’ using the last ten years’ data

  • After moving 9% or more over a five-day period, the stock rose in the next five days on 47% of the occasions.
  • After moving 18% or more over a ten-day period, the stock rose in the next ten days on 40% of the occasions.
  • After moving 13% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 48% of the occasions.
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This pattern suggests that there is not a very high chance of a rise in MT stock in the near term.

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 Returns Jan 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 MT Return 19% 19% 42%
 S&P 500 Return 4% 4% 79%
 Trefis Multi-Strategy Portfolio 8% 8% 241%

[1] Month-to-date and year-to-date as of 1/16/2023
[2] Cumulative total returns since the end of 2016

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