Financial Data and Key Metrics Changes - The adjusted EBITDA for Q3 2025 improved to $143 million, representing a 52% increase over the prior quarter, driven by margin expansion from higher realized prices and improved mix [23] - Steel shipment volumes were 4 million tons in the quarter, a reduction from the prior quarter due to summer slowdowns and continued market discipline, but the average selling price increased to $10.32 per net ton, up $17 per net ton over the prior quarter [23][24] - The CapEx budget for 2025 is now $525 million, down from the original expectation of $700 million, reflecting reduced spending at Stelco and changes in the DOE project at Middletown [25] Business Line Data and Key Metrics Changes - Automotive shipments increased from 26% to 30% share, while coated volumes moved from 27% to 29% share, contributing to the improved average selling price [24] - The company locked in multi-year agreements with major automotive OEMs, covering higher sales volumes and favorable pricing through 2027 or 2028 [5][6] Market Data and Key Metrics Changes - The U.S. automotive sector is experiencing a significant rebound, with domestic steel demand increasing, particularly in the automotive sector [4][5] - The Canadian market continues to lag expectations, with only 9% of total sales coming from Stelco, attributed to the Canadian government's inaction against steel dumping [15][16] Company Strategy and Development Direction - The company is focused on capitalizing on the resurgence of the U.S. automotive sector and has positioned itself as a key supplier of domestic steel [11][12] - A memorandum of understanding was entered into with a major global steelmaker to leverage the company's U.S. footprint for onboarding their downstream industrial clients [13][14] - The company is exploring opportunities in rare earth elements within its mining portfolio, identifying two sites in Minnesota and Michigan for potential development [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the automotive sector and the effectiveness of cost actions taken, while cautioning that the company is not declaring victory yet [30] - The company expects continued demand growth from automotive contracts and anticipates that operational improvements will lead to amplified EBITDA and cash flow [29] Other Important Information - The company was awarded a five-year $400 million fixed-price contract by the U.S. Department of War for grain-oriented electrical steel, reinforcing its strategic importance to national security [19][20] - The company is proceeding with the Butler project on schedule and is working with the DOE on the Middletown project, which is critical for future operations [21] Q&A Session Summary Question: How quickly could the company produce products in the rare earth vertical? - The company is assessing two promising sites and is optimistic about developing mining capabilities, potentially in cooperation with Canada [33][34][39] Question: What is the status of the asset sale process? - The company has closed on a portion of the sale of FPT and is considering selling its direct reduction plant in Toledo, Ohio, while deprioritizing the asset sale process due to the MOU with the global steelmaker [44][46] Question: Did any new automotive contracts kick in during this quarter? - Some contracts began on October 1, and while Q4 may not see significant activity due to typical shutdowns, the company is excited about the upcoming contracts in 2026 [61][62] Question: What is the expected volume growth from new automotive agreements? - The new contracts are expected to generate more margin, and the company has significant capacity to meet the automotive industry's needs [72][75] Question: What is the nature of the electrical steel contract with the U.S. government? - The contract is a multiyear opportunity to build a strategic inventory of electrical steel for national security purposes [89][90]

Consumer Concerns - The top concern for US consumers over the past year has been tariffs, with 25 million discussions recorded on the topic, and nearly 40% of mentions being negative, resulting in a 16 to 1 negative to positive ratio [3][4] - Spanish-speaking consumers have specific concerns regarding tariffs, particularly related to soy, beef, and sugar, which account for 15% of their discussions [7] Buying Patterns - Consumers are postponing purchases of appliances and furniture, indicating a shift in buying patterns due to economic pressures [6] - The holiday shopping season is approaching, and there is a mixed outlook; while some consumers may pull back on spending, there is also an increase in discussions about purchasing vehicles, which rose by 12% in the last month [11][12] Inflation and Medical Costs - Inflation is a secondary concern for US consumers, with medical care costs being the top issue related to inflation, closely tied to the tariff discussions [10] Labor Market and AI Concerns - Discussions around AI and its impact on employment are significant among younger adults, with over 12% of discussions from Gen Z and millennials expressing concerns that AI is harming their career prospects [15] - The unemployment rate has been a trending concern, although it has been decreasing since the beginning of the year [15]

CLEVELAND-CLIFFS INC. Third-Quarter 2025 Earnings Presentation October 20, 2025 © 2025 Cleveland-Cliffs Inc. All Rights Reserved. FORWARD-LOOKING STATEMENTS This presentation contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. All statements other than historical facts, including, without limitation, statements regarding our current expectations, estimates and projections about our industry or our businesses, are forward-looking statements. We ...

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Core Insights - The automotive industry is experiencing significant challenges due to geopolitical tensions, tariffs, inflation, and other disruptions, leading to a cautious but resilient outlook for 2025 [1][2][4] Industry Outlook - Despite initial bearish forecasts, the U.S. automotive sector has shown unexpected resilience, prompting Barclays to upgrade its rating from "negative" to "neutral" [3] - S&P Global revised its U.S. light vehicle sales estimates upward by approximately 2%, projecting 16.1 million vehicles for 2025 and 15.3 million for 2026, indicating a slight recovery in demand [4] Economic Factors - Consumer spending remains relatively stable, contributing to a more optimistic economic outlook, with analysts noting that tariffs have not had as devastating an impact as feared [5] - However, headwinds persist, including slowing disposable income growth and consumer pessimism, which could affect future sales [4][5] Earnings Expectations - Major automakers are expected to report double-digit declines in adjusted earnings per share for Q3 but remain profitable on an adjusted basis, with production levels exceeding expectations [6] Tariff Impact - Tariffs have cost automakers billions this year, but deregulation and corporate gains under previous administration policies are expected to help mitigate these costs [7] - The automotive industry is navigating a complex landscape of tariffs and economic pressures, with some analysts expressing cautious optimism [10][11] Supplier Concerns - The automotive supplier industry is under significant pressure, with concerns about the ability of smaller suppliers to absorb additional cost increases [14][19] - Recent bankruptcies in the supplier sector, such as First Brands Group, have raised alarms about the health of the private credit market [16][17] Consumer Behavior - There are indications of a K-shaped economic recovery, where wealthier consumers are faring better than lower-income households, which may impact vehicle sales [22][25] - Delinquency rates for subprime auto loans have reached record highs, indicating stress among lower-income consumers, while higher-income borrowers remain stable [26] Future Considerations - The potential for tariffs to be passed on to consumers remains a critical question for 2026, with uncertainty about how consumers will react to increased vehicle prices [27]

Core Insights - The year 2025 has seen significant changes in American retirement planning due to the actions of the Trump administration [1][2] Group 1: Changes in Retirement Planning - An executive order issued on August 7, 2025, directs federal agencies to review guidance on including alternative assets like cryptocurrencies, private equity, and real estate in defined-contribution retirement plans such as 401(k) plans [3] - This development is viewed as one of the largest shifts in retirement planning in decades, allowing broader access to investments previously reserved for wealthy individuals [4] Group 2: Expert Opinions on Investment Strategies - Financial experts recommend a cautious approach to including alternative investments in retirement portfolios, suggesting a limit of 5%-10% exposure to mitigate risks [5] - Experts have noted that tariffs imposed by the Trump administration have negatively impacted retirees' purchasing power, particularly affecting those on fixed incomes [5][6] Group 3: Global Investment Strategies - In response to the weakening dollar due to changing trade policies, financial advisors are increasing international exposure in portfolios to hedge against currency risk and capitalize on global growth opportunities [6]

Core Insights - The Vanguard FTSE Developed Markets Index Fund is highlighted for its low fees, high yield, and excellent diversification, making it a strong investment option [1] - The S&P 500 has increased by 13% in 2025 but is underperforming compared to previous years, indicating potential loss of momentum [1][2] - The Vanguard Developed Markets Index Fund has outperformed the S&P 500 with a 25% increase this year, suggesting it may continue to do so in 2026 [2] Market Conditions - U.S. companies may face challenges in upcoming quarters due to tariffs and trade policies, which could negatively impact the S&P 500 [3] - A diversified investment strategy, particularly in international markets, may provide better growth opportunities as countries seek alternative trade routes [4] Fund Characteristics - The Vanguard FTSE Developed Markets ETF has a diversified portfolio with 53% in Europe, 35% in the Pacific, and under 11% in North America, positioning it well for growth amid global trade shifts [4] - The fund includes approximately 3,900 stocks, featuring blue-chip companies like SAP, AstraZeneca, and Roche, with an average price-to-earnings multiple of just under 17, significantly lower than the S&P 500's average of 26 [5][6] Investment Outlook - The Vanguard fund's modest valuation and strong blue-chip stocks may offer greater upside potential compared to the S&P 500, which is seen as overdue for a decline [6] - Exposure to more reasonably priced international stocks can help minimize downside risk and provide a margin of safety for investors [7] - The Vanguard fund is considered a solid long-term investment option, aiding in portfolio diversification and reducing dependence on U.S. stocks [8] Financial Metrics - The fund boasts a low expense ratio of 0.03% and an attractive yield of 2.8%, enhancing its appeal for long-term investors [9]

Market Reactions to Presidential Announcements - The U.S. stock market has shown extreme sensitivity to presidential announcements, particularly those from President Trump, leading to significant volatility in stock prices [2][4][12] - On October 10, 2025, the S&P 500 dropped by 2.71%, the Nasdaq 100 fell by 3.56%, and the Dow Jones Industrial Average decreased by 1.90% following the announcement of a 100% tariff on Chinese imports [3] - A previous social media post regarding a "China cooking oil threat" resulted in a loss of $450 billion in market value within minutes, highlighting the immediate impact of presidential rhetoric on market stability [4] Corporate Responses to Tariffs - Companies like IBM have managed to mitigate the impact of tariffs, with its CFO stating that tariffs have a "minimal impact" due to diversified supply chains, where imported goods account for less than 5% of overall spending [6] - The semiconductor sector, including Nvidia and AMD, faced significant declines due to the tariff announcements, with Nvidia dropping nearly 5% [3] Pharmaceutical Sector Impact - President Trump's announcement on October 17, 2025, to reduce the price of Ozempic from around $1,000 to $150 led to a decline in shares for Novo Nordisk, which fell between 5% and 6.4%, and Eli Lilly, which saw a drop of 4% to 5.3% [7][8] - Analysts from JPMorgan and BMO Capital Markets suggested that the market's negative reaction to the price cuts was overblown, indicating that many insured individuals already pay significantly lower prices for similar medications [9] Global Trade Dynamics - Colombia is facing potential tariffs and a cessation of U.S. aid due to drug trade issues, with current tariffs at 10% on most U.S. imports [10] - India has been warned of "massive tariffs" if it continues purchasing Russian oil, although immediate market reactions to these threats were not evident, suggesting a level of investor desensitization to such rhetoric [11] Overall Market Trends - As of October 20, 2025, the S&P 500 gained 0.23% to 6680 points, the Dow Jones increased by 0.52% to 46,256.04, and the Nasdaq rose by 0.65% to 24,916.79, indicating a recovery following earlier declines [12] - The market has developed a pattern of reacting sharply to announcements, followed by a recovery as details emerge, illustrating a cycle of "sell the tweet, buy the clarification" [12]

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Summary of Key Points from the Conference Call Industry or Company Involved - The conference call primarily discusses the **global economic outlook** and **market trends** for 2025-26, with a focus on various countries and regions including the US, Eurozone, and Asia. Core Insights and Arguments - **Global Growth Projections**: - Global growth for H2-24 is projected at **3.9%**, with a decline to **2.5%** in H1-25, followed by a recovery to **3.3%** in H1-26 [9][10] - The US growth forecast shows **2.6%** in H2-24, declining to **1.6%** in H1-25, and stabilizing around **1.6%** in H1-26 [9] - **Tariff Impact**: - Approximately **$500 billion** worth of tariffs are currently in place, with customs revenue collection at an annualized rate of **$355 billion** [15] - The US weighted average tariff has increased to **14.5%**, up from **2.5%** at the start of the year, indicating a significant rise in trade costs [17] - **Inflation and Economic Indicators**: - The effective tariff rate is estimated at about **10%** for total US imports, affecting inflation dynamics [17] - The CPI for the US is projected to average **3.7%** in 2025, with core CPI at **3.1%** [159] - **Sector Contributions**: - The technology sector is highlighted as a major driver of investment growth, contributing significantly to overall economic performance [92] - **Labor Market Dynamics**: - The US unemployment rate is expected to stabilize around **4.2%**, with payroll growth showing signs of slowing down [159] Other Important but Potentially Overlooked Content - **Regional Variations**: - Different regions exhibit varying growth rates, with Asia (ex Japan) projected at **4.3%** and the Eurozone at **0.9%** for 2026 [8] - **Consumer Behavior**: - There is a noted disparity in liquidity among income groups in the US, with the top 20% experiencing higher liquidity levels compared to the bottom 80% [95] - **Future Risks**: - The report emphasizes potential risks from geopolitical events and policy changes that could impact market stability and economic growth [218] - **Valuation and Investment Risks**: - Multi-asset investing carries inherent risks including market, credit, and interest rate risks, which could affect asset valuations during periods of high volatility [218][219] This summary encapsulates the key points discussed in the conference call, providing insights into the economic outlook, tariff impacts, inflation trends, and sector contributions, while also highlighting potential risks and regional variations.