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The Trade War Is Paving the Way for This Steel Stock to Gain over 300% 
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    The Trade War Is Paving the Way for This Steel Stock to Gain over 300% 

    By Alexander Bird, Associate Editor, Money Morning - August 9, 2018

    When the White House announced it would impose a 10% tariff on all steel imports from China earlier this year, Wall Street feared that it would hurt the manufacturing sector's bottom line.

    With quarter two earnings rolling out, it looks like Wall Street's worst fears are coming true.

    Some of the nation's largest industrial companies have tightened their belts in the face of rising material costs, punishing their bottom lines - and their shareholders.

Article Index

  • The Trade War Is Paving the Way for This Steel Stock to Gain over 300% 
  • This Steel Stock Isn't Fazed by Trump's Tariffs
  • Here's the Real Impact Trump's Tariffs Will Have on the Best Steel Stocks
  • Defensive Investing: Use Dollar-Cost Averaging to Reduce Volatility Risks
  • A Tale of Two Investments: U.S. Steel Scenario Illustrates the Power of Dollar-Cost-Averaging
  • Buy, Sell or Hold: Peabody Energy Corp.'s (NYSE: BTU) Global Dominance Is Heating Up Profit Growth
  • World's Largest Steelmaker Warns of Slowing Economic Recovery
  • Is the Plunge in Commodities a Bear Market Signal for Stocks?
  • Historic Agreement Ends 40 Year Old Iron Ore Benchmark as Miners Get Short-Term Pricing Contracts
  • Guilty Plea by Rio Tinto Execs Shines Light on Complexity of China's Iron Ore Market
  • Iron Ore Negotiations Reach an All-Too-Familiar Impasse
  • Soaring Lumber Prices and Strong D.R. Horton Report May Not Signal an Immediate Rebound in Housing Stocks
  • This Investment Portfolio is on Fire ...
  • U.S. Trade Spat with China Escalates, But is Unlikely to Cause a Significant Rift
  • Russian Steelmaker Severstal Forges Deal for the Historic Sparrows Point Mill Near Baltimore
  • Steelmakers from India and Russia are Pursuing the Former Bethlehem Steel's Historic Sparrows Point Mill
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The Trade War Is Paving the Way for This Steel Stock to Gain over 300% 

By Alexander Bird, Associate Editor, Money Morning - August 9, 2018

When the White House announced it would impose a 10% tariff on all steel imports from China earlier this year, Wall Street feared that it would hurt the manufacturing sector's bottom line.

With quarter two earnings rolling out, it looks like Wall Street's worst fears are coming true.

Some of the nation's largest industrial companies have tightened their belts in the face of rising material costs, punishing their bottom lines - and their shareholders.

This Steel Stock Isn't Fazed by Trump's Tariffs

By Alexander Bird, Associate Editor, Money Morning - June 13, 2018

This Steel Stock Isn't Fazed by Trump's Tariffs

Over the last three months, The Trump administration has rocked the global trade landscape by imposing tariffs on international steel and aluminum imports.

Today, we're looking at a steel stock that can block out the trade war noise coming from Washington and produce profits no matter what happens in the global trade landscape.

It's a stock that was just upgraded to "outperform" by Credit Suisse thanks to business fundamentals that can easily weather steel tariffs.

Here's the Real Impact Trump's Tariffs Will Have on the Best Steel Stocks

By Alexander Bird, Associate Editor, Money Morning - March 2, 2018

Financial markets are reeling after President Trump announced plans to introduce strict tariffs on the importation of aluminum and steal.

However, Wall Street is missing the fact that this kind of trade realignment presents some exciting profit opportunities to investors - especially in the best American steel stocks. In fact, we believe that new steel and aluminum tariff will prove a boon to the American steel market and increase the steel industry's market value...

Read more...

Defensive Investing: Use Dollar-Cost Averaging to Reduce Volatility Risks

By Larry D. Spears, Contributing Writer, Money Morning - August 11, 2010

Dollar-cost averaging has long been a strategic staple among mutual fund buyers. Longer-term investors use it to smooth out the effects of short-term price fluctuations, but the tactic seldom has been practical for purchasers of individual stocks - that is until now.

For those unfamiliar with the strategy, dollar-cost averaging - also known as constant-dollar investing - involves the regular purchase of a smaller fixed-dollar amount worth of shares over time, as opposed to the lump-sum purchase of a large number of shares at once. For example, rather than buy $1,200 worth of shares of fictitious company XYZ in January, you might buy $100 worth of XYZ shares each month for the full year.

The technique offers several advantages for fund investors:

  • Because you are investing a fixed-dollar amount at regular intervals, you don't have to be concerned with trying to time the markets.
  • Since the fixed-dollar amount you invest buys more shares when prices are low and fewer when they are high, your average cost basis levels out over time. This reduces the risk that you might pay too high a price by making a lump-sum purchase at the wrong time.
  • The lower average cost basis mutes the impact of short-term volatility on your existing holdings.
  • You can build a sizable position in a single fund, even if you never have a large sum of money to invest at any one time.

Read More…

A Tale of Two Investments: U.S. Steel Scenario Illustrates the Power of Dollar-Cost-Averaging

By Larry D. Spears, Contributing Writer, Money Morning - August 10, 2010

To understand the potential defensive-investing benefits of dollar-cost averaging, let's take a look at two scenarios involving United States Steel Corp. (NYSE: X).

Thanks to the general downtrend in the market, the May 6 "flash crash," and the rapid subsequent rebound, U.S. Steel shares fell from a 52-week high of $70.95 on April 6 to just $52.81 at the market close on Friday, May 14.

Indications of some new life in the construction sector and an uptick in autos would seem to indicate that steel demand could rise - which would be especially good for U.S. Steel, which supplies both businesses.

You've got $10,000 to work with.

Read More…

Buy, Sell or Hold: Peabody Energy Corp.'s (NYSE: BTU) Global Dominance Is Heating Up Profit Growth

By Horacio R. Marquez, Contributing Editor, Money Morning - August 2, 2010

While advanced economies are still facing high levels of unemployment, more than a billion people in emerging markets are experiencing advancing standards of living.

As these emerging economies - especially China and India -grow, there is a strong trend toward urbanization. People are leaving the countryside for the cities in droves in order to reap the promise of the global economy. This secular process alone places huge demands on the existing infrastructure.

This growth is also boosting manufacturing and energy needs. China has surpassed the United States in both car production and energy consumption. And India's Tata Motors Ltd. (NYSE ADR: TTM) launched the cheapest car in the world, the Nano, which costs roughly $2,500. The critically acclaimed vehicle's mass appeal and affordability is creating additional congestion on India's famously overcrowded streets. Adding more fuel to the global-demand fire, most emerging economies implemented a strong dose of infrastructure spending within their budgets as a result of the global financial crisis of 2008.

The result of all that infrastructure development, urbanization and increased consumer affluence is a myriad of new road, bridge and building construction, additional urban development, and stepped-up production of cars, home appliances and other consumer goods. All of these developments require two key ingredients to become reality: Steel and energy.

Read More…

World's Largest Steelmaker Warns of Slowing Economic Recovery

By Don Miller, Contributing Writer, Money Morning - July 29, 2010

Lakshmi Mittal, the chairman of ArcelorMittal (NYSE ADR: MT), the world's largest steel company, yesterday (Wednesday) issued a warning about the slowing pace of the global economic recovery and lowered his company's third-quarter forecast.

ArcelorMittal posted a 146% rise in net profits in the second quarter compared with the same period last year as demand recovered. However, the company warned third quarter results would slump by as much as 30% - hit by a seasonal dip in demand during the European summer, slower growth in China, and higher costs for iron ore.

"The improved performance in the second quarter is in line with our expectations and reflects the continued slow and progressive recovery," Mittal told The Wall Street Journal. "The challenge for the second half of the year will be to pass on the full extent of cost increases to our customers."

Read More…

Is the Plunge in Commodities a Bear Market Signal for Stocks?

By Don Miller, Contributing Writer, Money Morning - June 9, 2010

The biggest slump in commodity prices since 2008 is undermining confidence on Wall Street and fueling speculation that a new bear market has been born.

Despite forecasts for accelerating economic growth and higher prices, commodities, with the notable exception of gold, are taking a big hit.

The Journal of Commerce (JOC) Commodity Index that tracks the growth rate of steel, cattle hides, tallow and burlap plunged 57% in May, the most since October 2008 - something that gave analysts a sense of déjà vu.

Read More…

Historic Agreement Ends 40 Year Old Iron Ore Benchmark as Miners Get Short-Term Pricing Contracts

By Don Miller, Contributing Writer, Money Morning - March 30, 2010

In a historic moment for commodities markets, two of the world's largest iron ore producers, Vale SA (NYSE ADR: VALE) and BHP Billiton Ltd. (NYSE ADR: BHP) signed short-term contracts for record prices with Asian steel mills that effectively replace a 40-year-old system of setting prices annually.

The landmark move by Vale and Anglo-Australian BHP ended the annual benchmark system when they signed new short-term deals linked to quarterly prices on the spot market, with the Brazilian company winning a 90% increase. Another large iron ore producer, Rio Tinto PLC (NYSE: RTP) has yet to sign any new contract, but is expected to soon follow.

The primary mineral used in steel, iron ore directly affects steel prices and the cost of everyday goods, including refrigerators, cars, and washing machines. That made the recent negotiations one of the most important issues for the global economy and commodity markets.

Read More…

Guilty Plea by Rio Tinto Execs Shines Light on Complexity of China's Iron Ore Market

By Don Miller, Contributing Writer, Money Morning - March 23, 2010

When four Rio Tinto PLC (NYSE ADR: RTP) executives stunned observers by pleading guilty to bribery charges in a Shanghai courtroom, it brought to light the unorthodox and complicated nature of doing business in China's iron ore industry.

Unlike corrupt transactions in other resource-rich countries where customers often receive bribes or kickbacks in exchange for arranging lucrative contracts, in China just the opposite is often the case.

The Rio Tinto executives, for instance, were accused of receiving bribes in return for delivering supplies of highly-desirable iron ore - the key commodity in China's burgeoning steel-making industry.

The four executives admitted receiving $13.5 million (92.18 million yuan) between them in bribes, China's state news agency Xinhua reported, citing court documents. They could face up to 20 years in prison.

But the gist of the story revolves around China's chaotic iron-ore trading system.

Read More…

Iron Ore Negotiations Reach an All-Too-Familiar Impasse

By Jason Simpkins, Managing Editor, Money Morning - March 17, 2010

Iron ore negotiations have ground to a halt - again.

Iron ore producers and consumers were so far apart last year that negotiations on pricing broke down entirely. No price benchmark was reached between major Australian iron ore miners and China's steel mills.

Instead, steelmakers resorted to buying their iron ore from smaller producers on the volatile spot market. And they may have to do the same thing again this year.

That's because iron ore producers - led by Brazil's Vale SA (NYSE ADR: VALE) and Australian juggernauts BHP Billiton (NYSE ADR: BHP) and Rio Tinto PLC (NYSE ADR: RTP) - are reportedly looking for an increase of as much as 90% in the benchmark price.

"The negotiations are difficult. These miners hope for a large rise" in the 2010 benchmark price of iron ore, said Deng Qilin, the chairman of both the China Iron and Steel Association and the Wuhan Iron & Steel Group. "We can't digest the pressure of what they're asking us."

Read More…

Soaring Lumber Prices and Strong D.R. Horton Report May Not Signal an Immediate Rebound in Housing Stocks

By Jon D. Markman, Contributing Writer, Money Morning - February 11, 2010

Crude oil, gold, steel and commodity stocks have all taken it on the chin to varying degrees so far this year.

But not every commodity has suffered this same tough fate. In fact, there's even been a major standout. It's a commodity that most investors rarely think about.

I'm talking about lumber.

Read More…

This Investment Portfolio is on Fire ...

By William Patalon III, Executive Editor, Money Morning - January 12, 2010

Dear Money Morning reader:

We get asked a lot about the track record of The Money Map Report, our monthly advisory service in which Keith Fitz-Gerald, Martin Hutchinson and the rest of the Money Morning team ferrets out investment opportunities based on some of the most powerful global trends at work today.

Let me just say this: This portfolio is on fire.

Of the 24 stocks and exchange-traded funds (ETFs) in the portfolio, 21 are winners. Indeed, only three of the holdings are under water - two of them by such nominal amounts as 1.77% and 1.24%.

But the gains are eye-popping.

I obviously can't name the stocks or ETFs in the Money Map portfolio, but the current list of winners includes gains of 122.2%, 91.5%, 61.9%, 53.1%, 46.2%, 37.6%, 35.1%, 32.1%, 31.6%, 28.8% and 28.6%.

The Money Map Report is able to notch such gains because team members identify the most-powerful and profitable trends long before Wall Street even understands what's happening.

In fact, here's an example from yesterday (Monday).

Have you been reading about steel prices? The steel market was hit hard by downturns in the auto and construction markets. But prices have been on a tear. Scrap steel has zoomed 25% since November. Just yesterday, The Wall Street Journal reported that China's growing appetite for steel alone should be enough to cause steel prices to soar.

Now Wall Street is calling for steel prices of all types to continue their advance well into the spring. In fact, ABCNews.com yesterday reported that Wall Street equity strategists are now telling investors to buy the leading global steel stocks.

That's a nice call. But it's a little late.

Back in April - that's nine months ago - Money Map's Hutchinson told subscribers to buy shares of Korean steel giant Posco Inc. (NYSE ADR: PKX).  At the time, Hutchinson said three catalysts would send the shares higher:

  • A turnaround in Korea.
  • Rising steel demand from China.
  • And an overall increase in global steel prices.
Hutchinson was three for three. Since he made that call, shares of the world's No. 4 steelmaker have soared more than 91% - with Wall Street now telling readers to get into the game.

In other words, while Wall Street was waiting for a clear signal as to which way steel prices (and steel stocks) were heading, Money Map Report readers were almost doubling their money on Posco.

And that's just one example.

In the newest issue, for instance, The Money Map Report will look at such opportunities as:

  • A cash-rich company that's in a great position to buy back shares - and that may become a takeover target.
  • A firm that's perfectly positioned to capitalize on the uptick in natural-gas prices, and that may be snapped up as part of the anticipated consolidation in the energy sector.
  • And a firm that's poised to benefit from a rising tide of IT investments.
The Money Map team scours the globe in search of the best investment opportunities. The fact that it usually does so well ahead of Wall Street is the main reason for the returns we listed above.

In the aftermath of the worst financial crisis of our lifetime, it's understandable that most investors want to avoid Wall Street and paddle their own canoe.

That task becomes a lot easier, though, when you have the right kind of map to guide you.

That's what we work to provide.

Good investing ...

William Patalon III
Executive Editor
Money Morning/The Money Map Report

[Editor's Note: For more insight on global-investing profits, hot portfolios, and the best investment opportunities around the world, check out The Money Map Report.]

News and Related Story Links:

  • ABCNews.com:
    Sector Wrap: Steel Producers Surge.
  • The Wall Street Journal:
    China's Steel Appetite Reshapes Industry; Rising Production Looks Unlikely to Exceed Demand, Propelling Prices Higher World-Wide for Raw Materials
    .

Read More…

U.S. Trade Spat with China Escalates, But is Unlikely to Cause a Significant Rift

By Jason Simpkins, Managing Editor, Money Morning - September 14, 2009

Shortly after U.S. President Barack Obama announced hefty import duties on Chinese-made tires, China's Ministry of Commerce over the weekend said it would explore possible sanctions against U.S. automobile and chicken imports. The dispute has caused some concern over an escalation in protectionist measures between the two nations, but few analysts believe the dispute will […]

Read More…

Russian Steelmaker Severstal Forges Deal for the Historic Sparrows Point Mill Near Baltimore

By William Patalon III, Executive Editor, Money Morning - March 22, 2008

By William Patalon III Executive Editor Money Morning/The Money Map Report Russian steelmaker OAO Severstal said today (Friday) that it's agreed to acquire ArcelorMittal (MT) SA's historic Sparrows Point steel mill near Baltimore, in an $810 million deal that will expand its U.S. reach. It expects to conclude the all-cash deal in the second quarter. […]

Read More…

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