Sentiment is turning higher, and today’s tariff panic will be just a blip shortly.“Davidson” submits:Real Personal Income continues to trend higher as one of several key economic indicators that continue to defy those few recession forecasts that persist.
Light Weight Vehicle Sales SAAR rises again now in a definite uptrend as supply chains for Japanese manufacturers, Honda and Subaru, have improved dealer stocks. Toyota dealers remain at low levels, ~30day supply, but should improve soon with their supply chain issues similar to other Japanese manufacturers.My best suggestion in this space is Cooper-Standard (CPS) which remains heavily discounted even though turning cash flow positive in 2024 as management forecasted. At ~0.1x Pr/Sales, CPS has potential to reach, or exceed, 1.0x on higher sales as investors wake to these sales figures.
PMI reported at 50.9. Industrial equities typically rise when the PMI rises above 50 thereby giving those with a PMI focus the signal to turn more positive on economic expansion. Industrial Production(IndPro) has remained at high levels during the past nearly 30mos(one pop to 50.3 Mar 2024) with the PMI decidedly below 50 signaling a recession which never arose. Recession fears generated overt strategies to take advantage of market disruptions that are being gradually reversed i.e., trading Treasuries into an extreme Yield Curve inversion and a focus solely on the Mag 7.With the manufacturing PMI over 50 and likely to stay that way the next several years, industrial companies should benefit.
Construction Spending is higher for all key measures with decent revisions higher for recent months. This series continues to support industrial economic expansion due to reshoring in a generally expanding economy.
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