Core Viewpoint - Investors are optimistic about Cleveland-Cliffs despite a challenging quarter, as the company managed to beat earnings expectations and is making progress in cost-cutting measures [1][4]. Group 1: Earnings Performance - Cleveland-Cliffs reported a net loss of $470 million, or $0.97 per share, reversing the small profit from Q2 2024 [3]. - The company shipped a record 4.3 million net tons of steel, a 7.5% increase year-over-year, but average selling prices fell by 10%, leading to a decline in revenue [3]. Group 2: Investor Sentiment - Investors reacted positively, with shares rising 13.7% after the earnings report, partly due to management's disclosure that $323 million of the net loss (about 69%) was from non-recurring charges related to idled facilities [1][4]. - The market is betting on the company's ability to improve profitability through cost reductions and the absence of non-recurring charges in future quarters [6]. Group 3: Future Guidance - Cleveland-Cliffs aims to reduce its cost of production by approximately $50 per ton in 2025 compared to 2024, which could help offset the decline in steel prices observed in Q2 [5]. - The company is also focusing on reducing capital spending and selling, general, and administrative expenses, alongside potential benefits from tariffs on imported steel [5].

this morning on the back of earnings results. Our Pippa Stevens is with us and has more on the quarter. Morning Pippa. >> Good morning Carl.So Cleveland-cliffs did post a mixed quarter but the stock is in the green with the company saying it's starting to see positive impacts from the Trump administration's steel tariffs. Now for the second quarter, the company posted a larger than expected loss of $0.97% per share on revenue of 4.93% billion, which was in line with Wall Street analysts, although down sligh ...

Market Overview - Pre-market futures indicate a positive start to the trading week, with the Dow up 70 points, S&P 500 up 10 points, Nasdaq up 25 points, and Russell 2000 up 13 points, although all indexes are off their all-time highs from earlier in the month [1] Company Earnings - Cleveland-Cliffs (CLF) reported a loss of -$0.50 per share, better than the projected -$0.68, with revenues of $4.93 billion exceeding Zacks consensus by +0.62%, leading to a +4.5% increase in shares [2] - Domino's Pizza (DPZ) missed earnings expectations by -3% with earnings of $3.81 per share, marking its second miss in three quarters, but revenues of $1.15 billion were above expectations, reflecting a +4.3% year-over-year increase, resulting in a +3% rise in shares [2] Economic Indicators - The U.S. Leading Economic Indicators (LEI) report for June is expected to show a decline to -0.2% from May's -0.1%, with negative LEI numbers observed over the past six months, indicating potential recession signals [3][4] Upcoming Earnings Reports - More than 20% of S&P 500 companies are set to report Q2 earnings this week, with Alphabet (GOOGL) and Tesla (TSLA) being key highlights [5] - Alphabet is expected to see a +13.2% increase in earnings and +11.1% in overall revenues, while Tesla is projected to experience a -23.1% decline in earnings year-over-year and -11.9% in revenues [6] Economic Data Releases - This week will also see the release of Existing & New Home Sales, S&P flash Services and Manufacturing PMI, and Durable Goods Orders, with mixed expectations for these data points [7]

Group 1: Market Overview - Pre-market futures indicate a positive start to the trading week, with the Dow up 70 points, S&P 500 up 10 points, Nasdaq up 25 points, and Russell 2000 up 13 points, although all indexes are off their all-time highs from earlier in the month [1] Group 2: Company Earnings - Cleveland-Cliffs (CLF) reported a loss of -$0.50 per share, better than the projected -$0.68, with revenues of $4.93 billion exceeding Zacks consensus by +0.62%, leading to a +4.5% increase in shares [2] - Domino's Pizza (DPZ) missed earnings expectations by -3% with earnings of $3.81 per share, marking its second miss in three quarters, but revenues of $1.15 billion were up +4.3% year over year, resulting in a +3% increase in pre-market trading [3] Group 3: Economic Indicators - The U.S. Leading Economic Indicators (LEI) report for June is expected to show a further decline to -0.2% from May's -0.1%, with most LEI numbers negative over the past six months, indicating potential recession signals [4][5] - Upcoming economic reports include Existing & New Home Sales, S&P flash Services and Manufacturing PMI, and Durable Goods Orders, with mixed expectations for these data points [7] Group 4: Future Earnings Expectations - Alphabet (GOOGL) is expected to see a +13.2% increase in earnings and +11.1% in overall revenues, while Tesla (TSLA) is projected to experience a -23.1% decline in earnings year over year and -11.9% in revenue [6]

Summary of Key Points from the Conference Call Industry Overview - The focus is on **China's Supply-Side Reform 2.0 (SSR2.0)**, particularly in the **manufacturing sector** including steel, solar, and cement industries [1][10][18] - The context includes ongoing **PPI deflation** and the need to address **overcapacity** and **intense competition** in various sectors [2][25][27] Core Insights and Arguments - **Resilience in Manufacturing**: Despite weaknesses in the property market, manufacturing **Fixed Asset Investment (FAI)** remains strong, indicating potential for recovery [1] - **PPI Challenges**: The Producer Price Index (PPI) is struggling in negative territory, with prolonged deflation impacting profitability across industries [1][38] - **SSR2.0 Expectations**: Authorities are expected to implement SSR2.0 to combat overcapacity and price wars, with less aggressive capacity cuts compared to SSR1.0 [2][3][15] - **Sector-Specific Measures**: The reforms will likely include capacity control, production cuts, and regulatory tightening, particularly in sectors like coal, aluminum, and steel [4][63][64] Key Differences Between SSR2.0 and SSR1.0 - **Demand Stimulus**: SSR1.0 had strong stimulus measures, while SSR2.0 is expected to have a milder approach [3][15] - **Capacity Concentration**: SSR1.0 focused on upstream sectors dominated by state-owned enterprises (SOEs), whereas SSR2.0 will address mid- and downstream sectors [3][15] - **Implementation Challenges**: Policymakers may face difficulties in enforcing reforms due to the complexity of the current industrial landscape [3][65] Potential Outcomes and Stock Picks - **Base Case Scenario**: Mild demand stimulus with modest improvements in prices and margins for steel, cement, and solar sectors. Preferred stocks include **Baosteel, Tongwei, and Conch Cement** [5][18] - **Bull Case Scenario**: Stronger demand stimulus could benefit additional sectors like lithium and batteries, with preferred stocks being **Angang, CNBM, CATL, and Tongwei** [5][18] - **Bear Case Scenario**: Less effective supply control could lead to underwhelming demand, favoring existing winners from previous cycles like **Hongqiao and Chalco** [5][18] Important but Overlooked Aspects - **Historical Context**: Previous successful reforms in coal and aluminum contrast with the underperformance of the steel sector, highlighting the need for targeted interventions [12][15] - **Trade Tensions**: Rising trade disputes, particularly in the steel and chemical sectors, could complicate the reform landscape [38][50] - **Labor Market Impact**: The expected labor market impact from SSR2.0 is anticipated to be minimal compared to previous reforms, with less aggressive capacity cuts [66][70] Conclusion - SSR2.0 is positioned as a critical response to ongoing economic challenges in China, with a focus on stabilizing prices and improving profitability across key sectors. The effectiveness of these reforms will depend on the implementation of supportive demand-side measures and the ability to manage overcapacity effectively [1][27][66]

Summary of Key Points from the Equity Research Report Industry Overview - The report discusses the potential for a new round of supply-side structural reforms in China, referred to as Supply-Side Structural Reform 2.0 (SSSR2.0), following a call from the Central Commission for Financial and Economic Affairs (CCFEA) to address price competition and eliminate obsolete capacity [2][11]. Core Insights 1. **Differences from Previous Reforms**: - SSSR1.0 focused on upstream industries like coal, steel, cement, and glass, while SSSR2.0 is expected to encompass both traditional industries (e.g., steel) and new industries (e.g., solar, auto, lithium batteries) [3][13]. - The current reforms may be driven by self-regulating industry associations and market players rather than solely by government mandates, which characterized SSSR1.0 [3][13]. - Economic conditions differ significantly; SSSR1.0 coincided with a boost from infrastructure projects, whereas the current economy faces challenges in property and consumption sectors [3][13]. 2. **Urgency of Reform**: - The solar industry is identified as having the highest urgency for reform due to low capacity utilization rates (73.5%) and negative return on equity (ROE) among top players [5][24]. - Other industries in need of reform include steel, lithium batteries, and auto [5][24]. 3. **Potential Outcomes**: - The pace of capacity elimination may be slower in SSSR2.0 compared to SSSR1.0 due to the different measures and types of enterprises involved (state-owned vs. private) [4][26]. - It may take longer for Producer Price Index (PPI) growth to return to positive territory due to weaker demand and less stringent supply-side controls [4][26]. Key Beneficiaries - The report highlights five stocks that could benefit from the anticipated supply-side measures: - **Tongwei** (Hold) - **Longi Green** (Hold) - **First Applied Material** (Buy) - **Lead Intelligent** (Buy) - **Bank of Jiangsu** (Buy) [7][35]. Additional Insights 1. **Historical Context**: - SSSR1.0 led to significant improvements in capacity utilization and ROE for industry leaders, suggesting that similar outcomes could be expected for leading firms in SSSR2.0 [30][31]. - During SSSR1.0, industries involved in reforms outperformed the CSI300 benchmark, with large caps generally outperforming small caps [31][33]. 2. **Current Economic Indicators**: - The report notes that PPI has been in contraction for 33 months since October 2022, indicating ongoing economic challenges [14][26]. - Capacity utilization rates have declined across various sectors, with electrical equipment and auto industries experiencing significant drops [16][29]. 3. **Regulatory Measures**: - Recent measures include standardized conditions for solar manufacturing and initiatives to curb price wars in the auto industry, indicating a proactive approach by regulatory bodies [21][22]. 4. **Market Sentiment**: - Investor expectations for SSSR2.0 are fueled by recent government discussions and publications highlighting the need for structural reforms to address overcapacity and competition issues [2][12]. This comprehensive analysis provides insights into the potential impacts of SSSR2.0 on various industries and highlights key stocks that may benefit from these reforms.

Financial Performance & Outlook - Cleveland-Cliffs reported revenues of $4.9 billion for Q2 2025[6] - Adjusted EBITDA for Q2 2025 was $97 million, with expectations for continued improvement from Q2 to Q3[6] - The company released over $200 million in inventory working capital during Q2 2025[6] - Cleveland-Cliffs expects to reduce steel unit costs by approximately $160 per ton over three years[55] Steel Shipments & Market Dynamics - Record quarterly steel shipments of 4.3 million net tons were achieved in Q2 2025[6] - Steel shipments increased by 150,000 tons from the prior quarter[11] - The average selling price (ASP) increased by $35 per ton due to higher index pricing, partially offset by lower slab pricing[11] Asset Optimization & Cost Savings - Flat-rolled optimization is expected to yield approximately $145 million in annual savings[15] - Repositioning away from non-core assets is projected to generate around $165 million in annual savings[15] - The company announced the idling of several facilities, including Riverdale, Conshohocken, and Steelton, resulting in approximately $90 million, $45 million, and $30 million in expected annual savings, respectively[16] Trade & Tariffs - Tariffs on steel imports from various countries, including Canada, Brazil, and Mexico, have increased to 50%[18] - Imports of light vehicles from Japan and South Korea are down by more than 30% year-to-date[22] Capital Expenditure & Debt Management - The 2025 capital expenditure guidance has been lowered to approximately $600 million[57] - The company has a liquidity of $2.7 billion[6]

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Core Viewpoint - The article highlights S&P 500 dividend stocks that have experienced significant price declines, presenting them as attractive buying opportunities for long-term investors due to their strong fundamentals and consistent dividend growth. Group 1: Overview of Dividend Stocks - Dividend stocks are powerful wealth compounders, with the S&P 500 index showing over 300% growth in the past 25 years, and total returns exceeding 550% when including reinvested dividends [1] - The article identifies 10 S&P 500 dividend stocks that are currently trading at least 10% below their all-time highs, suggesting they are good buys for long-term holding [2] Group 2: Individual Stock Analysis - **Johnson & Johnson**: Down 11.5%, yield 3.4%, generated $95 billion in free cash flow over five years, returning 60% to shareholders, and has increased dividends for 62 consecutive years [4] - **ExxonMobil**: Down 11.6%, yield 3.7%, generated $55 billion in cash flow from operations in 2024, with a 42-year streak of dividend increases, and focusing on boosting cash flows post-acquisition of Pioneer Natural Resources [5] - **Procter & Gamble**: Down 14%, yield 2.7%, restructuring operations to target mid- to high-single-digit core earnings per share growth, and has increased dividends for 69 consecutive years [6][7] - **NextEra Energy**: Down 19%, yield 3.3%, operates the largest electric utility in America and is the largest producer of wind and solar energy, with over 20 years of dividend increases [8] - **Chevron**: Down 19%, yield 4.8%, has increased dividends for 38 consecutive years, and recently acquired Hess in a $53 billion deal [10] - **American Water Works**: Down 24%, yield 2.4%, serves over 14 million customers, targeting 7% to 9% annual dividend growth [11][13] - **Realty Income**: Down 29%, yield 5.6%, pays monthly dividends and has increased them for 110 consecutive quarters, owning over 15,000 properties [14] - **Oneok**: Down 29%, yield 5%, has a network of pipelines spanning 60,000 miles, targeting 3% to 4% annual dividend growth [15] - **Nucor**: Down 30%, yield 1.7%, America's largest steel company, has increased dividends for 52 straight years, and aims to return at least 40% of earnings to shareholders [16] - **Medtronic**: Down 33%, yield 3.3%, world's largest medical device manufacturer with $33.5 billion in revenue, plans to divest its diabetes business, and is close to becoming a Dividend King [18]

Company Overview - Companhia Siderúrgica Nacional (CSN) is one of the largest steel producers in Brazil and the second largest iron ore producer, following Vale SA [1] Analyst Insights - The analyst focuses on undercovered stocks primarily in Brazil and Latin America, occasionally covering global large caps [1]