Materials Down On Trade Policy Concerns -- Materials Roundup

FeaturesDow Jones Newswires

Shares of miners and other commodities ticked down as traders hedged their bets on the outlook for U.S. trade policy.

The possibility that the U.S. implements a protectionist trade policy is growing as deadlines for decisions on steel imports and other trade issues approach, according to one brokerage. "While NAFTA negotiations are ongoing, nearer-term deadlines approach for the U.S. administration to take action on--or ignore--recommendations initiated under U.S. law for protectionist actions, such as tariffs, on specific products and industries," said analysts at brokerage Morgan Stanley, in a research note. "Electing to initiate tariffs is not without precedent in recent U.S. history, but has not heretofore meaningfully changed the country's free trade stance. Yet we must recognize that a tariff action could challenge investors' perception whether the U.S. will adhere to current free trade policies."

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While domestic steel makers would benefit from tariffs, any sign of protectionism could hurt the "reflationary" trade, pushing investors out of cyclical sectors such as materials and back into defensive sectors such as telecommunications and utilities.

--Rob Curran, rob.curran@dowjones.com

(END) Dow Jones Newswires

January 22, 2018 16:24 ET (21:24 GMT)

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