Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of iron ore producer Cliffs Natural Resources Inc (NYSE:CLF) jumped 12% today after getting some bullish signs from the market.
So what: There wasn't any Cliffs Natural Resources-specific news, but it looks as if demand might be up globally in the first quarter. The Brazilian Ministry of Development, Industry, and Foreign Trade said that Brazil's iron ore exports jumped 26% from a year ago in March to 30.8 million tons. At the same time, iron ore exports from Port Hedland in Australia, where 55% of the country's exports go, increased 6.3% from a year ago to 36.6 million tons in March.
Now what: The implication is that global demand for iron ore is up, which should be good for Cliffs Natural Resources on the volume side. The problem is, iron ore prices are still at multiyear lows and it's not likely that higher volume will make up for weak pricing. I still don't see this as a great buy sign given Cliffs Natural's weak fundamentals, and won't be buying the market's excitement today.