Shares of industrial metal makers, miners surge on IMF’s China comments
Shares of industrial metal makers and miners are surging after the latest International Monetary Fund, or #IMF, update.
The global economic recovery is on solid ground, said the IMF in a report out Monday. “As in our April forecast, the World Economic Outlook Update projects 3.5% growth in global output for this year and 3.6% for next,” the IMF predicted.
CHINA GROWTH CONTINUES
Government policies in China have been the foundation for the recent high growth rates in the country. The IMF has raised its China growth view for 2017 and 2018 by 0.1% and 0.2% points, respectively, to 6.7 % and 6.4%. “But higher growth is coming at the cost of continuing rapid credit expansion and the resulting financial stability risks. China’s recent moves to address nonperforming loans and to coordinate financial oversight, therefore, are welcome,” added the agency.
MUTED EXPECTATIONS FOR US GROWTH
The IMF said the said globally speaking, the critical hindrance to global growth will come from the United States. “Over the next two years, U.S. growth should remain above its longer-run potential growth rate. But we have reduced our forecasts for both 2017 and 2018 to 2.1 percent because near-term U.S. fiscal policy looks less likely to be expansionary than we believed in April,” argued the IMF.
Copper prices jumped to the highest levels since this past February. According to a Citi research note,”Sentiment towards copper from the physical market has improved as fabricators in China have replenished their inventories,” said Reuters.
STOCKS TO WATCH
Shares of metal makers and miners are all higher in afternoon trading, with copper miners Freeport-McMoRan (FCX) and Southern Copper Corporation (SCCO) up 14% and 3%, respectively. Iron ore miners Cliffs Natural Resources (CLF) is up 5%, with peers Vale S.A. (VALE) and Rio Tinto plc (RIO) both up over 4%. Aluminum makers are also jumping, with Alcoa up almost 2%, with peers Century Aluminum (CENX) up 4% and Kaiser Aluminum (KALU) up fractionally. Shares of United States Steel Corporation (X) are 5% higher.
To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners. We offer stock picks, option picks, daily stock upgrades, stock downgrades, and earnings reports that are delivered to your email.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.