Manufacturing Recession Ending Soon But Overall Economy Still Strong
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Manufacturing has been in a recession for about 18 months, but the overall economy has not due to strength in services and other areas.
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Inventory issues that built up during COVID have led to an overhang and inventory drawdowns, which may signal the manufacturing recession is ending.
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Most economic data tells us about the past, not the future, so predicting recessions is difficult. Market timing based on economic data rarely works.
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Sentiment indicators can help with tactical asset allocation, but investing is more art than science - you want to be greedy when others are fearful.
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The S&P 500 recently hit an all-time high, so fear does not seem to be the dominant emotion in markets right now.