Base and Industrial Metals Weight on Markets
This morning, most of the leading base and industrial metal stocks are declining sharply lower. Stocks such as Freeport McMoRan Copper & Gold Inc (NYSE:FCX), Southern Copper Corp (NYSE:SCCO), Rio Tinto plc (ADR) (NYSE:RIO), and BHP Billiton Limited (ADR) (NYSE:BHP) are all declining sharply lower to start the day. FCX stock should have intra-day support around the $28.26, and $27.81 levels.
The base and industrial metal stocks are declining for two major reasons today. The first reason is due to a decline in China's HSBC Flash Manufacturing PMI index. The index reading came in at 47.7 indicating contraction in Chinese manufacturing. Next, the Caterpillar Inc earnings report was very poor and this is certainly confirming the poor economic news out of China. A further pullback in the base and industrial metal stocks is very likely in the near term.