My guess is FCX got a bit overbought yesterday with the help of short covering and today it is stabilizing. So long as copper can keep going up in the ST FCX shares will do fine.
Regarding the disappointing numbers from China, IMO they are just beginning and will get worse. Significantly worse. If correct, copper prices will fall and FCX shares are going to suffer. The dividend will offer support but I don't think we have yet seen a LT bottom.
I agree with most of the reasons given on the thread, especially the news out of China. One other factor I would throw out for the steep decline is yesterday’s volume and move up. This brought a lot of weak hands into the stock and these were taken out. I did buy August Calls on today’s dip. The two potential catalysts I do see is the price of copper has been firming up and a stimulus program being announced in China. FWIW, I also bought more calls going into CHK earnings - the August 2nd $22s stick out like a sore thumb. GLTA
All the above. Plus there was nothing very positive in CC. There does not seem to be much upside for copper and gold prices or demand. There seem to be much downside for oil price.
All the copper and gold and oil deep in the ground is valuable but may not be profitable for foreseeable future.
My bet is computer algor. trading. The volume this morning was very heavy. But not just this stock. Rather interesting good news and the stock barely moves past 2%+. No news and we are down almost 4%.
WS is incredible sometimes. After an earnings beat, after news of two insiders with major purchases at higher prices than this from June, and today it trades below where it was two days ago before anyone believed anything positive for this company. After the fearful are done selling, maybe sanity comes back. The key for me was the insider buys. These were massive. I think that means something others are ignoring.
IMO the tone of the CC call yesterday showed there to be a split between the desires of management and board over the debt issues.. Right now we are at about a 70% debt equity ratio with the approximate $11B used to acquire the oandg assets. The speakers used the term disciplined approach along with putting off some development matters to increase cash flow to get the debt down. It sounded like they must do whatever to keep the dividend as is. So, right now we have an asset rich company, probably more fairly valued nearer 40 BUT the street wants to see how they intend to balance debt service and utilization of assets before committing and that did not come across yesterday. The dividend will support the company unless it becomes too costly, roughly 1.25B now, or the Fed lets rates rise. Right now, this is a neutral bet in this sector.
First reason is that there is news "From copper to cameras; feeling the heat from China slowdown" about 1-hr ago.
Second reason is that some SHORTs who bought at high $26s think may be it is good time to pull out to buy other down-stocks.
Third reason is some are pulling out by getting scared, just looking at the current-sudden-downturn...
But ppl do not realize it would be the last good chance to jump in...
Earning looks solid, Oil & Gas look good
Drilling is the next strong objective
Europe is coming back (meaning MFG is coming back)
Recently there were large natural disasters in Asia (Korea, China, etc.), the metal demand will be steady...
Don't worry after yesterday C.C. and firm earning report, ppl with real $ are optimistic and very interest in FCX... unlike little ppl like us. They will be jumping in soon, after speaking to their financial advisors, who will take some time to re-allocate the $ from other investment, and that's when the game change will occur.
Plus, once Citi pulls FCX out from the "SELL" rating, you will love yourself for holding on to FCX.
II think this stock is being heavily manipulated by the MMs who want to drive the price up to make a quick profit and immediately drive it down to do the same thing again. There is no other explanation for all the analysts yesterday downplaying the earnings miss and touting the revenue upside and positive forecast, and today doing the reverse. My hope is that in the long run, management's strategy of expansion into oil and gas will pay off, and the manipulators will move on to another victim.