- U.S. steelmakers are rising, led by U.S. Steel (NYSE:X) and AK Steel (NYSE:AKS), even after Commercial Metals (NYSE:CMC) reported tepid FQ1 results and said it expects to see lower shipments in Q2 due to seasonality; also, Nucor (NYSE:NUE) says it will invest $1.35B to build a new plate mill in the U.S. Midwest.
- In pre-market action: AKS +4.7%, X +3.6%, STLD +2.1%, NUE +1.8%, MT +0.7%.
- Earlier, steelmakers in Europe rose as rebar futures in China posted their best close in more than five weeks after China's central bank announced cuts to banks’ reserve requirement ratio.
- Pres. Trump said yesterday that he is now planning a steel barrier on the U.S. border with Mexico instead of a concrete wall, and that he would phone the CEO of U.S. Steel.
- KeyBanc's Philip Gibbs says recent channel checks on the steel industry pointed to average seasonal demand in Q4 2018 and participants expect Q1 2019 shipments to come in a bit below normal seasonality due to weakness in auto and energy markets.
- The analyst reiterates his Overweight rating and $72 price target on NUE as company-specific drivers could add 20% to his 2019 EPS view over time, while balance sheet strength and the Trump administration’s focus on infrastructure will benefit the stock.
- ETF: SLX
- Source: Bloomberg First Word
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Original article