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Manufacturing still contracting

Reuters reports the ISM survey, and other sources:

U.S. manufacturing contracted for the ninth straight month in November, with factories facing slumping orders and higher prices for inputs as the drag from import tariffs persisted.

The Institute for Supply Management survey on Monday also showed some manufacturers in the transportation equipment industry linking layoffs to President Donald Trump's sweeping duties, saying they were "starting to institute more permanent changes due to the tariff environment." They added "this includes reduction of staff, new guidance to shareholders and development of additional offshore manufacturing that would have otherwise been for U.S. export."

/snip

Despite subdued orders for factory goods, manufacturers paid more for inputs last month, a sign that inflation could remain above the Fed's 2% target for a while. The survey's prices-paid measure increased to 58.5 from 58.0 in the prior month.
Sure, the Fed can cut rates, but it will be like pushing string.

This isn't politics as usual in the Old D. C. One man is responsible for these tariffs.

Comments

  • edited December 1
    I totally agree. It is frustrating to watch. Nothing that we can probably do.

    Except, maybe use this information/observation to avoid losses or parlay to a buying opportunity. Similar to Dotcom or the Great Recession or 2022s inflation. , if one is very certain that a big reckoning is coming, they must be ways to use that effectively.

    My notions are:

    •Reduce risk exposure significantly. After 3 years of phenomenal gains, stepping back shouldn't be too hard to swallow.

    •Identify the best no/low risk parking positions. Perhaps, quality bond funds with a track record in difficult times?

    •Look to quality fixed income that might benefit from rate reductions, despite inflationary pressures.

    •Find alternative investments best suited to weather this particular set of circumstances.

    •Wait for an appropriate re-entry point to riskier assets.

    I'd like to hear ideas, thoughts, even helpful criticisms. Maybe we can form some more detailed plans/ideas?

  • edited December 1
    Connected to those methods of self-protection you suggest, I have lately bought into the iShares EWS ETF. All foreign companies, specifically in Singapore. It's concentrated, with three-fourths of assets in the top 10. But that's also a reflection of the relative size of their economy and the literal number of companies trading on their bourse. It is a passive fund, intended to mimic the behavior of that country's Market.

    I chose Singapore because of its political and social stability and its reliable currency, which along with others, is gaining against the US dollar since the Orange Inauguration. Singapore is low-crime, low corruption, so I understand. I only hope I'm not late getting in. This year so far, EWS is already up 30+ percent. But uncle Trumpy is not going to be changing his tune. It's not his tune, anyway. He's not smart enough; others in his White House Crime Syndicate are behind "his" decisions.

    Former trading partners are establishing new Markets and arrangements, ex-USA. Those that continue to trade with the USA will surely be smart to diversify away from a now-unreliable American "leadership" employing fear, manipulation and threats against even ALLIES as negotiating tactics.

    I've already got not a small amount outside the US border, with BLX. I don't have a single bad word to say about it--- yet. :)
    Also, geography is a consideration: I didn't want to diversify beyond the U.S. and then be un-diversified, regionally.
    BLX 7.78% of portf.
    EWS is 0.31% so far.
    FBP is in Puerto Rico. Not foreign, but Chucky has it mis-classified. On the other hand, I see Chucky considers BLX as domestic. (They do have some kind of branch office in the U.S. Maybe that's what Chucky's bot is seeing?)

    (BUZZER sound. Wrong! But thanks for playing anyway.)

  • 'It's not his tune, anyway. He's not smart enough; others in his White House Crime Syndicate are behind "his" decisions."

    That's exactly what I think too.
  • edited December 1
    An interesting line of reasoning from @DrVenture with thoughtful suggestions which have merit.

    "I'd like to hear ideas, thoughts, even helpful criticisms. Maybe we can form some more detailed plans/ideas?"

    I'm left at this point with many more questions than answers. Some might be disposed to flee to an asset that's tripled in price over the past 3 or 4 years. Not convinced of that escape route either. One thing I'm fairly certain of: There will be more and higher inflation.

    PS - Should go without saying that the current game plan is to stimulate the hell out of the economy up until the 2026 mid-terms, now less than a year away. The new Fed chief will quarterback. Look for some giveaways like "tariff rebate checks" to enter the discussion or even come to fruition.

    Now back to 1929.
  • edited December 1
    @hank- Where you at? I'm up to where FDR has just taken office and Mitchell is in big trouble.
  • edited December 2
    It can be challenging to manufacture products in America nowadays.
    A rocket scientist asked "Is it possible to make something in America and be competitive in the marketplace?"
    He conducted an experiment to manufacture a product with every single part made in the United States.
    https://youtu.be/2T8M7Gxc590?t=2693
  • edited December 2
    Old_Joe said:

    @hank- Where you at? I'm up to where FDR has just taken office and Mitchell is in big trouble.

    I'm in December '29. Muddle through around a chapter a night (audiobook version). ISTM Hoover has been in denial a while. Many are blaming the Fed for allowing speculation to run rampant in the years leading up ...
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