One market-moving event. The stocks positioned to benefit
The relentless surge in interest rates is casting long shadows over the financial markets and leaving investors wondering which way to turn. We’ve identified one stock which offers a “macro” style solution to the complex challenges posed by higher bond yields and inflationary pressures.
Developments in the bond market are leaving investors with few obvious investment opportunities. Growth stocks are hindered by the fact that the yield on 10-year US Treasuries is anchored firmly around 4.63%. A dollar of speculative profit from a growth stock one decade from now is simply worth much less when risk-free sovereign yields offer a steady premium today.
Confirming the old adage that two different things can be true at once – the appeal of bonds is also limited by the same rising yields. Lower bond prices (and higher yields) are partly being driven by oversupply of new bond issuances. At the same time demand is restricted by investors baulking at the idea of buying bonds to facilitate spending by governments that simply can’t manage their own budgets.
With uncertainty reducing the attractiveness of fixed-income products and broader stock markets, one alternative to returning to the low returns of cash is to incorporate macro themes into decision making. One stock offers a way to navigate the complexities of the current series of challenges.
The Pick
1. Freeport-McMoRan Inc. (FCX) — The Purest Play on the Copper Bull Market
FCX stock, which is listed on the NYSE, offers the closest thing to a pure copper play while offering the convenience of being able to invest in stocks rather than copper futures. That’s crucial as the structural bull thesis for the stock starts with the metal the company mines and processes.
In general, copper stocks should be challenged by rising interest rates, which have traditionally choked off demand for the metal most closely associated with economic growth. But FCX has qualities which make it resilient to that threat and stand out from its peer group.
Political uncertainty — Pending U.S. tariff decisions on copper imports has pushed copper prices toward all-time records as importers into the US front-load their order books. Filling storage depots will only be a short-term fix if, or when, tariffs on copper imports are introduced. In the medium and long-term, FCX has significant undeveloped reserves and resources in the US and a portfolio of potential long-term development projects. It doesn’t take much to read between the lines that the company is poised to scale up its domestic US production as soon as the time is right, its own website stating: “Future investments are dependent on market conditions and will be undertaken based on the results of economic and technical feasibility studies, including the incorporation of innovation initiatives to reduce capital intensity.” Source: FCX.com
Macro tailwinds — Despite rising interest rates threatening a contraction in the global economy, copper prices have actually risen by approximately 40% over the last 12 months. That’s in response to changes in both supply and demand factors. A global supply squeeze is driven by declining Chinese refined copper output and a perfect storm of global mine supply issues. At the same time, long-duration demand from AI data centers, EVs, and grid electrification is causing a multi-year structural rebalancing of prices for the raw material.
Cash is king — FCX posted a massive Q2 earnings beat in July, guiding to $8.3 billion in operating cash flow for the full year. It has prudently used the surge in the global copper price to pay off its long-term debt and in the first half of 2026 also returned $600m to shareholders. With an ultra-low debt-to-equity ratio of 0.25 (which is 64% below its historical 10-year average), the company’s extremely healthy balance sheet leaves it able to exploit development opportunities without having to engage in issuing bonds at a time when the costs associated with that are rising.
Signs This Is Serious
Changes to broker ratings
FCX: Eleven analyst actions since mid-June show a broadly bullish sell side. Barclays (overweight, target raised to $82 on 27 July), Wells Fargo (overweight, $70), JP Morgan (overweight, $77), Goldman Sachs (buy, $74), B of A Securities (buy, $80) and UBS (buy, $77) all rate the stock a buy-equivalent, with Scotiabank at sector outperform ($77). RBC Capital (sector perform, $73), Morgan Stanley (equal-weight, $70) and Bernstein (market perform, $58.50) sit more neutral. No firm rates FCX a sell. The average price target across the eleven actions is approximately $74, with most firms raising targets through July as copper prices climbed — putting the stock’s last close of $73.93 broadly in line with consensus, even after its recent run.
What to Watch
Price charts and volume
FCX broke out sharply in August 2026, running from the mid-$60s to a 12-month high above $80 before easing back toward the mid-$70s into early September — consistent with copper’s own push toward record levels on tariff-driven front-loading of import orders.
Economic calendar
Sep 16: US Federal Reserve interest rate decision and press conference, 2pm ET — markets expect a move from the current 3.75% rate, with FOMC economic projections also released.
Sep 18: Bank of Japan interest rate decision, with markets pricing a possible hike from the current 1.00% rate; Japan also releases August inflation data the same day.
Also of note: FCX’s next earnings release isn’t due until 22nd October 2026, but with the firm positioned as well as it is, investors can instead look to the bond markets and these central bank decisions for pointers on when to enter into positions.
