FNKO - Hot Stocks: China stocks rally; copper rally boosts FCX; FNKO plunges almost 60%; TEAM slumps

Stocks rebounded on Friday as investors bet that the Federal Reserve-inspired selling from earlier in the week had gone far enough. Largely brushing off an inconclusive jobs report, the major U.S. equity averages all climbed more than 1%, breaking a four-session losing streak.

News out of China contributed to the upbeat sentiment. Signals that the country could ease its zero-COVID policy sparked gains in stocks like Nio ( NIO ), XPeng ( XPEV ), Li Auto ( LI ), Alibaba ( BABA ), Baidu ( BIDU ) and JD.com ( JD ).

Meanwhile, the possibility of renewed growth in China also sparked gains in industrial metals, like copper and aluminum. Based on this upswing, names like Freeport McMoRan ( FCX ), Alcoa ( AA ) and Southern Copper ( SCCO ) all benefited.

Looking to other parts of the market, disappointing earnings news led to many casualties. This included Funko ( NASDAQ: FNKO ), which plunged almost 60%, and Atlassian ( TEAM ), which retreated about 30%, following their respective quarterly updates.

Sector In Focus

Stocks tied to China-based companies saw significant buying interest on hopes that the world's most populous nation will back away from its zero-COVID policy , lowering the chances that industries in the country will be hampered by intermittent shutdowns.

The rally was led by China's EV sector. Nio ( NIO ) provided the vanguard for the group, climbing by nearly 18%. Meanwhile, XPeng ( XPEV ) advanced almost 15% and Li Auto ( LI ) posted a gain of more than 9%.

Looking outside the EV space, there were also gains among other high-profile China names . Alibaba ( BABA ) rose 7%, Baidu ( BIDU ) climbed 9% and JD.com ( JD ) recorded a surge of almost 10%.

Standout Gainer

Along with the country's technology sector, the potential reopening of China had an influence on other parts of the market. That included industrial metals , with copper prices soaring on the possibility that COVID shutdowns would become scarce in the near future.

Among the beneficiaries, Freeport McMoRan ( FCX ) surged almost 12%, rising $3.63 to close at $35.19. With the advance, the stock reached its highest level since June.

The advance allowed FCX to come further off a 52-week low of $24.80 set in July. However, even with the recovery, the stock remains about 15% lower for 2022 as a whole.

Elsewhere, other stocks tied to industrial metals also fared well during the session. Alcoa ( AA ) rose more than 12% and Southern Copper ( SCCO ) jumped about 11%.

Standout Decliner

The release of quarterly results caused shares of Funko ( FNKO ) to collapse, as a wave of selling took the stock lower by about 59%.

The maker of collectible figurines beat expectations with its revenue figure but faced inventory issues and inflation headwinds. As a result, it saw its Q3 net income drop 39% from last year, with the bottom-line figure significantly missing expectations .

Looking ahead, the company gave a dramatically downbeat profit forecast for the full year. With gross margins under pressure, the firm predicted adjusted EPS of $0.85 and $0.95. This compared to an analysts' consensus of $1.91.

With the results, FNKO cratered $11.58 to close at $7.92. Shares also touched an intraday 52-week low of $7.76.

Prior to the report, shares had been trading in a range, with a mild gain for the year. FNKO finished Thursday at $19.50, compared to a level of $18.80 at the close of 2021.

Notable New Low

Atlassian ( TEAM ) crumbled nearly 29% following the release of its quarterly update , which included a reduced forecast for 2023. With the retreat, shares reached a new 52-week low.

The Australian collaboration software maker largely matched projections with its Q1 results but provided a downbeat forecast, as the company warned of "companies tightening their belts and slowing their pace of hiring."

Specifically, TEAM predicted Q2 revenue of $835M-$855M. Analysts were looking for a total of close to $880M.

Investors fled from the stock in response to the weak forecast. Shares plunged $50.44 to close at $123.73. During the session, TEAM set a new intraday 52-week low of $115.06.

Looking longer-term, the late retreat added to weakness seen earlier in the year. Shares have now fallen about 65% for 2022 as a whole.

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