VanEck Vectors Steel ETF [SLX] Stock Forecast

The rationale for investing in natural resource equities and commodities has stayed consistent: to enhance portfolio diversification, access global growth and hedge against inflation. The sharp economic recovery from the depths of the pandemic coupled with continually evolving expectations in terms of future impact have recast the spotlight on natural resources and commodities.

Steel is a critical building block for construction projects and various products, making it an important indicator of the global economy. U.S. and Chinese steel prices have declined, with Chinese prices stabilizing in recent weeks. VanEck Steel ETF, a diversified steel fund, has seen a bullish trend and offers an attractive dividend yield, but its performance is dependent on Chinese economic strength.

The recent oil price rally, triggered by geopolitical tensions and extended production cuts by major oil-exporting nations, has driven oil prices to their highest levels in months.

Cyclical stocks, including those in the energy, financials, industrials, and materials sectors, are gaining strength, with the VanEck Steel ETF ranking first out of 37 in its sub class by Seeking Alpha's quant rankings. SLX, a relatively small fund with $128m assets under management, offers investors one-trade access to the steel industry and global industrialization, with a high yield of 4.1% on a trailing 12-month basis. Despite potential volatility in the coming months, the fund has high relative strength, strong quant ranking.

Emerging markets and commodities are showing strength amid a weak USD, which has a historical negative correlation with these sectors. Risk-on currencies like the Australian Dollar and Canadian Dollar have broken out against the USD, providing a supportive backdrop for emerging markets and commodities. If the USD breaks below its support, it could lead to a further decline, potentially triggering powerful uptrends in commodity and emerging market stocks.

In a surprise move, Saudi Arabia pledges to reduce its oil output further by a million barrels a day, causing a noticeable uptick in global oil prices.

With an ever-growing list of similar-sounding ETFs to choose from, finding the best is an increasingly difficult task. My report shows the top-rated ETF for each sector.

Oil prices staged massive decline this week due to demand concerns owing to global growth slowdown.

Oil prices increased considerably lately on surprise OPEC+ output cut.

The March U.S. ISM Manufacturing number did no favors for the 'no recession' camp. Still, economically-sensitive stocks are holding their own, and I see many global steel equities in the SLX ETF as attractive on valuation.

VanEck Vectors Steel ETF is a US stock and trading under the symbol SLX

VanEck Vectors Steel ETF stock price is $65.48 today.

Yes, VanEck Vectors Steel ETF is a publicly traded company.