Market Overview

Axiom: Stay Away From Mining Stocks

Share:
Axiom: Stay Away From Mining Stocks

It may still be too early to be bullish on metals and mining stocks. Axiom analyst Gordon Johnson believes the Federal Reserve’s hawkish commentary last week will trigger another leg down for a number of global metals, mining and mining equipment stocks.

According to Johnson, the biggest pressure on these stocks will come from China, where Axiom is predicting significant further devaluation of the yuan.

Johnson also predicts a softening in China property prices in coming months. April’s numbers were mostly positive on a year-over-year and month-over-month basis, but Johnson pointed out that they were more mixed than in previous months.

Related Link: Gold Crushed After Hawkish Fed Comments

“Of course, w/ loans for real estate dev in Apr. reined in from multi-yr. highs seen n Mar. + the fact that home prices increases continue to accumulate to tier-1 cities (Beijing, Shanghai, Guangzhou, & Shenzen), yet the three provinces that contain these cities were just 13.9 percent of total Apr. sales + gov’t curbs in Shenzen still taking hold, we expect prices to cool & do not see a material resurgence in iron ore/steel demand,” Johnson explained.

Sell Names

Axiom maintains Sell ratings on the following stocks:

  • Rio Tinto plc (ADR) (NYSE: RIO)
  • Cliffs Natural Resources Inc (NYSE: CLF)
  • Joy Global Inc. (NYSE: JOY)
  • United States Steel Corporation (NYSE: X)
  • United Rentals, Inc. (NYSE: URI)
  • Caterpillar Inc. (NYSE: CAT)
  • GATX Corporation (NYSE: GMT)
  • Trinity Industries Inc (NYSE: TRN)

Disclosure: The author holds no position in the stocks mentioned.

Latest Ratings for CAT

DateFirmActionFromTo
Oct 2020StifelMaintainsBuy
Oct 2020Morgan StanleyMaintainsUnderweight
Oct 2020Wells FargoUpgradesEqual-WeightOverweight

View More Analyst Ratings for CAT
View the Latest Analyst Ratings

 

Related Articles (CAT + CLF)

View Comments and Join the Discussion!

Posted-In: axiomAnalyst Color Short Ideas Emerging Markets Top Stories Markets Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

StockFirmActionPT
PMTB of A SecuritiesMaintains18.5
IVRB of A SecuritiesMaintains3.0
EFCB of A SecuritiesMaintains15.5
NYMTB of A SecuritiesMaintains3.5
NLYB of A SecuritiesMaintains8.5
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com