“The market is not buyin Biden, the market is always right“– Paul Ebeling
Reviewing Wednesday’s economic data:Industrial production increased 0.4% M-M in November. The capacity utilization rate jumped to 73.3%
The Key takeaway from the report was the strong growth seen in the production of motor vehicles and parts, which increased 5.3% and helped account for 0.4% of the 0.8% increase in manufacturing output
Other data suggested that a benign inflation environment could persist for a while, with import prices barely rising last month even as USD has weakened against prime trading partners currencies.
Strong production at factories is defying signs of a slowdown in the economy’s recovery from the coronavirus’s caused instant recession, mainly due to The Trump Business Policies.
President Trump’s COVID-19 containment policies have bolstered economic growth and growing employment, and we see a strong Q-4 report.
Manufacturing output rose 0.8% last month after rising 1.1% in October, the Fed said. Factory production is still 3.8% below its pre-chaos level. Motor vehicle production rebounded 5.3%
A shift in demand from services to goods during the COVID chaos is cause for manufacturing’s recovery. ISM is cautious in here.
Fed officials started a 2-day policy meeting Tuesday. Policymakers are expected to keep interest rates near Zero and deliver a program to pump more money into the economy. The market like cheap money.
A report from the New York Fed Tuesday showed its measure of manufacturing conditions in New York state fell to a reading of 4.9 in December from 6.3 in November. New York is down billions on the draconian measures it governor and NYC mayor have imposed on its citizens.
Manufacturers are optimistic about conditions over the next 6 months, reflecting the success of President Trump’s ‘Operation Warp Speed’ successful production of a vaccine for the virus. Manufacturing activity should pick mid-2021 as vaccine distribution leads to stronger overall economic growth.
Notably, the increase in manufacturing output was broad last month, with big gainers in the production of primary metals, computers and electronics, aerospace and miscellaneous transportation equipment. But production of consumer goods and business supplies dropped.
Manufacturing combined with a rise in mining output to lift industrial production 0.4% in November.
The Trump Policies continue to work while MSM ignore them completely.
“No one believed Trump and now everyone is trying to jump on the bandwagon. However, my concern now is that Biden will try to undo all of Trump’s positive accomplishments. To me, the most important is Biden’s “open door” immigration policies. In my opinion, this will have a very negative effect on the lower income families where the financial help is needed most.
“Another most important concern to me, as an economist, is Biden’s objective of raising taxes versus using revenue growth as a focused effort. Increased corporate taxes have never worked. They only act as a fuel for higher inflation through pass-through increased consumer prices.
“The same applies to personal income taxes for it is the upper income individuals which generate savings for reinvestment. Nixon taught us that plus his policies of higher import tariffs to protect the American worker along with a lower value of the Dollar in order to promote American exports, another employment additive!
“If Mr. Biden follows many of his stated new policies, combined with his look out below Cabinet picks, then on a Biden presidency our recovery trend will be snapped possibly as soon as at mid-point.
“Perhaps a focus should be placed on the quality of our food supply too. As the hungry obese American family in the lower income strata is not a very comforting thought, they for the most part eat junk food, ” says well renowned economist Bruce WD Barren.
Tuesday, the benchmark US stock market indexes finished on their highs: DJIA +337.76 at 30199.25, NAS Comp +155.02 at 12594.97, S&P 500 +47.13 at 3694.63
The Russell 2000 closed at a record high with a 2.4% gainer, followed by the S&P 500 (+1.3%), NAS Comp (+1.3%), and DJIA (+1.1%).
HeffX-LTN’s overall technical outlook for the major US stock market indexes is Bullish to Very Bullish in here.
- NAS Comp +40.4% YTD
- Russell 2000 +17.5% YTD
- S&P 500 +14.4% YTD
- DJIA +5.8% YTD
Looking Ahead: Investors will receive Retail Sales for November, the preliminary IHS Markit Manufacturing and Services PMIs for December, the NAHB Housing Market Index for December, Business Inventories for October, the weekly MBA Mortgage Applications Index, and the FOMC Rate Decision Wednesday.
Asian stocks rose Wednesday following the US rally on effective coronavirus vaccines and the growing prospect of more US stimulus cheered investors ahead of the Christmas Holiday season.
Have a healthy day, Keep the Faith!