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“Davidson” submits:

Positive reports as Industrial Production(IndPro) posts the highest level since Sept 2018 and Manufacturing Capacity posts a new high. Economic indicators continue to support economic expansion, even acceleration, as the PMI, a market psychology measure, registers recessionary conditions. The history is quite clear that when market psychology deviates from economic indicators, believe the economic indicators. The current narrative of reshoring manufacturing with current US tariff policy indicates that it is working.

The dip in Capacity Utilization is typical of expanding capacity not yet fully utilized. That is, manufacturers never ever build capacity to the current need. Management always builds capacity to not only meet anticipated peak demand but also demand expected several years out. There is an initial slump in Capacity Utilization when this occurs.

My perspective is economic activity is very much in an uptrend. Investors should remain fully committed to equities and avoid fixed income which may suffer as rates rise which I expect will occur as investors become more optimistic on the economy.

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