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more information. Now let's head right over to the first word breaking news test for today's afternoon call. Here he is Bill Maloney. Good afternoon, Charlie. Manuals averagers are under pressure today, with the DAL currently down fifty eight points, SP drop eleven and AZACT declines forty five, small cap six hundreds lowered by five points, and the US tenniel at one point five six percent. Eight out of tennesse to B sectors are lower, led by losses in healthcare,
materials and technology. Games for utilities and telecom doubt. Transports are a little change now as a biotechs where hit hard, falling three point two percent, utilities gain one and the vix is higher by ten percent down Leaders to the downside included United Health Group, Merk and Caterpillar, while Nike, Walmart, and Chevron led to the upside. New Amount Mining fell as much as eight point three percent amid declines in gold,
while especially farmer names led to the client. In an ESP five hunted healthcare index, Malin fell as much as five point nine percent after the belts not look for earnings from Workday HP and Williams Sonoma live on the first Breaking News dascom Bill Maloney, Charlotte, all right, thank you very much. We'll be all over those earnings, Bill Maloney. And to hear live breaking news over here Bloomberg type squawk a sq you a w K on your terminal.
I'm Charlie Pellett. That's subloom Bred business slash June listening to taking stock with Bim Box and Kathleen Hayes on Bloomberg Radio. And I'm alex A Baranca here for Kathleen Hayes today and we have Glencore on the mind. The company posted its lowest profit in its five year history, and it's seen as a reflection of the dire state of the mining industry. Here to tell us more is Phil Gibbs, vice president and equity research analysts focusing on
the industry at key Bank Capital Markets. Phil, what does this say about what's going on right now with raw material prices and and in the industry in general. Hey, Alex, good to be with you. From a high level, I think there's a common set thread from the release to the rest of the global medals and mining world, and and I think there's a little bit of cautious optimism. There was a clear recognition from Glencore that commodity prices have come off the bottom and broader second half profit
performance should improve a bit versus the first half. However, no one is jumping for joy given the world remains fragile and the long transition in China, which we've just gust in previous calls here from an infrastructure led economy to a consumer based economy is just starting and that
should be a long transition. So Glencore appears to continue to be managing the business in a very conservative manner, focus on reducing their leverage, maintaining their low cost position, selling non core assets, and keeping their previously curb capacities offline until better days are ahead and seen. I would say year to date at the US steel industry, which I follow more closely, has shown similar supply side discipline to how Glencore has managed their zinc supply, which has
supported steel prices domestically. But we think that's changing what zinc and coal prices? What are they up about? That is all driven by what the production cuts, as well as attempts by Bastions government to stimulate the Chinese economy. It could be um him, I think I think the key factor here is probably more on on the supply side um. And my my view is more on the on the U S steel industry, where where we've become
a bit more cautious as of late. I mean, after that big run for let's say U S steal tell us about what's going on in the U S steel market, didn't they sort of have a bountiful time because of the imposition of import tariffs they did? Um, I think we were cautiously optimistic on the industry, I would say
balanced the cautiously optimistic most of this year. As of late Friday, however, we now believe that's supplying demand, particularly for the U S sheet producers, where U S steal would be one UH that market we see now tipping the modest oversupply based on our view of peaking demand
and bottoming supply. So we think now after the run and steel prices which steel prices UH called hot rolled steel has been up over six off the bottom, we think pricing is now poised to more aggressively correct over the course of the balance of the year here, which did lead to downgrades on our views of U S Steel,
A k UH Steel Dynamics, and Olympic. And I think this environment could also create modest downside risk to seventeen fixed price automotive contracts, which I think many many investors at this point hope and believe are are are would improve. Is there a catalyst that would tip some of the sentiment around this industry back into more optimism versus maybe a we are not out of the woods yet uh
situation that we seem to have right now. Yeah, I think, Alex, it's really all based on on the supply and demand balance, and that's really what we what we hang our hat on. And we really wanted our most recent survey to tell us that the man was stabilizing let's say, incremental supply wasn't going to be a factor, but that's not really
what it said. UM. Unfortunately, our our survey came came across and and said that, uh, there was more potential for sub seasonal growth and key en use markets including automotives and including non residential construction, which make up about six of US steel demand. And I'd also say that US distributor daily sheet volumes are down three and a half percent here to date. This comes despite modest restocking
in the second quarter. And and really what drove us to change our view is that our distributor context now expect below normalized seasonal demand patterns in both the third and fourth quarters, which is what really troubled us. And some of that which which was new was that we are starting to see some some more some some new weakness and non residential construction. And you also have had the called the lethargy and the in the mining, rail,
agg and energy UH sectors already. So I think broader caution from US in terms of what we're seeing in in the US economic indicators as it comes from our U steal channel omnia on the demand side. So you're saying maybe just underweight the whole sector for a while. We are um, I think we're we're telling people to take a little bit of money off the table until we get uh some more some more visibility on the demand front over the next called forty five to sixty days.
And I think that there's also some natural uncertainty and caution in front of the US election. This is a very important election for for folks, and and that could also lead to some some more subdued capex over the next Like I said, um, thirty to sixty days, we've got to leave it there. Phil Gibbs is vice president and equity research analysts for Medals and Mining for Key Bank Capital Markets. Talking about the steel industry, this is Bloomberg.
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