Why Shares of Freeport-McMoRan Took a Hit Today

First, in a bad day for commodities in general -- cyclical commodities like oil, nickel, and aluminum prices declined -- Freeport-McMoRan's key mineral, copper, fell a few percentage points to about $3.68 per pound. Second, Scotiabank analyst Orest Wowkodaw downgraded the stock to sector perform from outperform, citing valuation and highlighting the downside risk to the price of copper coming from a slowing economy. As such, Wowkodaw's downgrade is a reminder that demand for an industrial metal like copper depends on growth, particularly as it's widely used across the economy.