In today\u2019s Steady\nInvestor, we look at what is going on in the markets and key takeaways for investors to consider, such as:<\/p>\n\n\n\n
Read on to get the\ndetails!<\/p>\n\n\n\n
Weakness in U.S. Manufacturing\nSpurs Recession Chatter \u2013 <\/strong>On Tuesday, the Institute for Supply Management (ISM)\nreleased U.S. manufacturing numbers that pointed to continued weakness in the\nsector. The U.S. manufacturing PMI came in at 47.8 in September, marking the\nsecond consecutive month of contraction and the weakest reading for the index\nsince 2009 (readings below 50 indicate contraction). The manufacturing\nrecession is a global issue, with many pointing to the trade war as the likely\nculprit. Global manufacturing activity as measured by IHS Markit contracted in\nSeptember, which marked the 5th<\/sup> sub-50 reading in 5 months. A trend\nof slowing global economic growth has arguably contributed to the weakness in\nmanufacturing, but it also underscores how interconnected the manufacturing\nsector is in terms of value\/supply chains and trade. Very few complex products\nare assembled completely in a single country. Other macroeconomic data pointing\nto weakness \u2013 which contributed to market volatility early in the weak \u2013 was\nU.S. factory activity contracting for the second straight month (and hitting a\n10-year low), and new export orders hitting their lowest levels since March\n2009.1<\/sup><\/p>\n\n\n\n ___________________________________________________________________<\/p>\n\n\n\n The Tug-of-War Between Bulls and Bears<\/a><\/strong><\/p>\n\n\n\n While manufacturing data adds to the case for a potential\nrecession, there is still an ongoing tug of war between the bullish outlook and\nthe bearish one. <\/p>\n\n\n\n Both views provide key takeaways for investors to consider. Take a\ndeeper look at the case for the bulls versus the case for the bears with our\nJust-Released October Market Strategy Report.<\/p>\n\n\n\n If you have $500,000 or more to invest and want\nto learn more, click on the link below to get your free report today!<\/p>\n\n\n\n Download Our Just-Released October Market Strategy Report<\/a>3<\/a><\/sup><\/strong><\/p>\n\n\n\n ___________________________________________________________________<\/p>\n\n\n\n Yes, But What About\nServices? <\/strong>Much of the concern this week centered around manufacturing\nweakness, but readers should note that manufacturing accounts for approximately\n10% of the U.S. economy, whereas services account for approximately 70% of the\ntotal economy. So even as manufacturing slows and even contracts, the key data\nto note is what\u2019s happening in the services sector, in our view. Looking to the\nISM Non-Manufacturing (Services) survey, which was released on Thursday, we see\nthat the services sector continued its expansion but at a slower pace than\nexpected. The ISM Non-Manufacturing reading came in at 52.6, which signals\ngrowth, but was lower than the expected 55.3 reading. Even still, growth is\ngrowth.3<\/sup><\/p>\n\n\n\n U.S. Stocks Finish\nthe Quarter (Q3) in Positive Territory \u2013 <\/strong>despite all the noise lately, U.S.\nstocks as measured by the S&P 500 posted modest gains (+1.7%) for the\nquarter ending September 30. As of the end of Q3, U.S. stocks had posted their\nbiggest year-to-date gains (+19%) in over 20 years. In our view, stocks have\nspent the better part of the year climbing the proverbial \u201cwall of worry,\u201d with\nfears about the trade war, inverted yield curve, and now manufacturing weakness\ndriving the narrative that the U.S. economy is fast-tracking to recession.\nStocks, at least to date, have been telling a somewhat different story. Low\ninterest rates across the world and modest, but still positive, growth have\nhelped keep money flowing into equities.4 <\/sup><\/p>\n\n\n\n America\u2019s Shale Boom\nis Showing Signs of Topping Out \u2013 <\/strong>in the first half of 2018, U.S. oil\nproduction grew at a 7% rate. In the first six months of 2019, that growth\nnumber is down to less than 1%, according to the Energy Department. Some of the\nslowing production is attributed to \u201ccore operational issues,\u201d such as wells\nthat were drilled too close to each other and producing less than expected. But\nanother reason cited for the slowdown was a plateau in the fracking technology\nthat had in previous years driven sizable year-over-year growth in production.\nThe U.S. production boom has helped alleviate global supply in times of shock\n(attack on Saudi Arabian facilities) or other supply disruptions, such as\nsanctions on Iran. If production falls going forward, there could be more\nvulnerabilities to total global supply, the glut of which has led to stable and\nrelatively low prices.5<\/sup> <\/p>\n\n\n\n Bull vs. Bear! <\/strong>Key\ntakeaways for investors to consider – <\/strong>On\nJanuary 22, 2018, the S&P 500 closed at 2,872. On September 27, 2019 \u2013\nnearly two years later \u2013 the S&P 500 closed at 2,977. For readers keeping\nscore out there, that marks a price gain of 3.66% over 20 months.6<\/sup>\nNot exactly an inspiring rate of return. <\/p>\n\n\n\n There has been a tug-of-war going on between bulls and\nbears. On one hand, global<\/p>\n\n\n\n economic growth continues to post gains, and on the other,\nthe trade war is hampering business investment, and manufacturing and\nindustrial production numbers are weakening.<\/p>\n\n\n\n Both views provide key takeaways for investors to consider. Take a\ndeeper look at the case for the bulls versus the case for the bears with our\nJust-Released October Market Strategy Report.7<\/sup><\/p>\n\n\n\n If you have $500,000 or more to invest and want\nto learn more, click on the link below to get your free report today!<\/p>\n","protected":false},"excerpt":{"rendered":" Mixed bullish and bearish signals in manufacturing and services, U.S. oil hits plateau<\/p>\n","protected":false},"author":3,"featured_media":7426,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-8281","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8281","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=8281"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8281\/revisions"}],"predecessor-version":[{"id":10696,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8281\/revisions\/10696"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=8281"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=8281"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=8281"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}