ArcelorMittal: Four Months After Russia Invades Ukraine
Four months after Russia invaded Ukraine, high energy prices and supply chain problems are still affecting Europe’s consumers, the sole target audience for ArcelorMittal's products (about 53% of sales in 2021).
After a solid rally on account of rising steel and iron ore prices, ArcelorMittal stock (NYSE: MT), the largest steel producer in Europe, is witnessing a correction, falling by 30% over the last month (about 21 trading days) and by close to 6% over the last week (five trading days). The selloff comes as multiple factors appear to cloud the outlook for the steel industry; high energy prices and supply chain issues are weighing on consumers in Europe, which is ArcelorMittal’s single largest market (about 53% of sales in 2021), while U.S Federal Reserve & other major central banks have been hiking interest rates at a more aggressive pace to combat surging inflation that could hurt global growth and hence affect steel demand from key consumers including automotive & construction industries - putting a dent in discretionary spending due to Covid-19 lockdowns in China - world's largest steel consumer; Separately, with Russian invasion of Ukraine now into its fifth month, concerns are also growing about global economy slowing down due to trade war between U.S & China as well as slowdown in emerging markets like India & Brazil that could hurt global growth & impact steel demand from key consumers such as automotive&construction industry
Now that the price of MT stock has fallen by about 30% over the past month, will it continue its downward trend in the near future, or is a rebound imminent? Based on historical performance, there's a good chance of an increase in MT stock over the next month. Out of 28 instances in the last ten years where MT stock saw a 21-day fall of 30% or more, 26 resulted in an increase over the subsequent one-month period (21 trading days). This historical pattern reflects 26 out of 28 cases or 90% chance for an increase in MT stock over coming one month, implying positive near term outlook for this stock. See our analysis on
Using the past ten years of data, the event probability and chance of rise can be calculated
- After moving -6% or more in five days, the stock increased on 50% of the following days.
- On 56% of the occasions following a ten-day rise of -12% or more, the stock moved up in the next ten days
- When the stock dropped -30% or more in a twenty-one-day period, it rose in the next twenty-one days on 93% of the occasions.
Over the next few days, MT stock is likely to increase in value.
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