Market Overview

Analyst: Steel Investors Need Action From Trump, Not Words

Share:
Analyst: Steel Investors Need Action From Trump, Not Words
Related X
Jim Cramer Shares His Thoughts On US Steel, Nokia And More
10 Stocks Moving In Wednesday's After-Hours Session
How Far Will The Fed Raise Rates? (Seeking Alpha)
Related STLD
25 Stocks Moving In Tuesday's Pre-Market Session
Earnings Scheduled For July 23, 2018

President Trump on Tuesday said he is considering a number of options for actions he could take to improve the struggling U.S. steel market, including imposing tariffs or quotas on imported steel. Trump said the U.S. steel industry is getting “decimated by dumping” of foreign steel into the market.

"I look at it two ways: I want to keep prices down, but I also want to make sure that we have a steel industry and an aluminum industry, and we do need that for national defense," Trump said.

Trump has ordered an investigation into the potential risk that U.S. steel imports pose to national security, the groundwork for him potentially using his Section 232 powers to restrict steel imports. In January, Trump made a similar decision to implement a 30 percent tariff on imported solar panels.

Height Securities said on Wednesday that, despite Trump’s tough language, investors shouldn’t expect immediate action. Height said the potential for negative economic fallout from steel tariffs or alienation of key U.S. allies are two factors holding back the White House from making a move.

“We expect that yesterday's meeting was intended primarily as a messaging tool by the White House and that the President's remarks, much like his threat of a ‘reciprocal tax’ from Monday, represents a return to campaign-style rhetoric rather than a clear indicator of immediate action,” Height said in a note.

If Height is correct, the gains in steel stocks on Wednesday morning may be unwarranted, at least at this point:

  • United States Steel Corporation (NYSE: X) was up 2.2 percent.
  • Steel Dynamics, Inc. (NASDAQ: STLD) up 1.3 percent.
  • AK Steel Holding Corporation (NYSE: AKS) up 2.5 percent.
  • Nucor Corporation (NYSE: NUE) up 0.8 percent.

Related Links:

US Steel Shares Drop After Gordon Johnson Issues Sell Rating

First Solar And Sunrun: A Renewable Energy Pair Trade From Credit Suisse

Latest Ratings for X

DateFirmActionFromTo
Jun 2018CitigroupMaintainsBuyBuy
May 2018UBSMaintainsSellSell
Apr 2018CitigroupMaintainsBuyBuy

View More Analyst Ratings for X
View the Latest Analyst Ratings

Posted-In: Donald TrumpAnalyst Color Commodities Politics Top Stories Markets Analyst Ratings General Best of Benzinga

 

Related Articles (AKS + NUE)

View Comments and Join the Discussion!

Cramer Looks At The Dow's Biggest Losers

Kinross Gold's Q4 Earnings Preview