Trump Love Can't Save Caterpillar or U.S. Steel From SlumpBy
Infrastructure bill may have to wait until 2018, Axios reports
Metals from aluminum to zinc and iron ore also dipped Thursday
Doting words from President Donald Trump about Caterpillar Inc.’s bulldozers and U.S. Steel Corp.’s pipeline prospects couldn’t save the two companies from a slump in material stocks Thursday.
Shares of the Peoria, Illinois-based machinery maker posted the biggest decline in five months while the Pittsburgh-based steelmaker lost as much as 10 percent and ended down 7.9 percent. A report emerged Thursday that a jammed congressional to-do list could push a massive U.S. infrastructure bill back to 2018, delaying new demand for raw materials and construction equipment.
Trump has touted a $1 trillion infrastructure spending package over 10 years that would invest in roads, bridges and airports, as well as Buy America policies that would boost domestic companies that sell metals and machinery. Copper has risen more than 10 percent since Trump was elected on bets of improving demand helped by the president’s spending pledge.
At a White House meeting with industry executives on Thursday, Trump said, “I love Caterpillar,” and indicated he might go out and drive one of the company’s machines soon. He then told U.S. Steel Chief Executive Officer Mario Longhi that he will be putting domestic producers of the metal “heavy” into the pipeline business and that projects like Keystone XL and Dakota Access would need to use American-made steel.
While Trump’s public comments and Twitter postings over the past month have moved the share prices of aircraft manufacturers to drug makers, they failed to abate Thursday’s selloff. Caterpillar is still up 45 percent in the past year and 13 percent since the election, while U.S. Steel more than quadrupled in the past year and is also up 78 percent since the election, helped by an increase in demand and a slew of successful trade cases against foreign steel products.
Repealing and replacing Obamacare, tax reform, the budget and the Supreme Court vacancy could push Trump’s infrastructure bill to 2018, Axios reported, citing Republicans it didn’t name.
Metals from aluminum to zinc and iron ore also fell.