By: Scott Davis
Folks, in the link below please find our latest Melius Macro Views slide deck. Key takeaways below:
- Our data signal rising cycle risk, but noise around trade/tariffs make it very hard to interpret what we are seeing…
- For example, inventories are high and now at levels not seen since the last recession (p. 9), but are they high because of slowing demand or are trade concerns causing higher safety stock levels? We think the latter right now.
- Coming out of our recent conference, corporates are still confident in forward order books, though sentiment has taken a hit from China/Mexico tensions
- May/June corporate data points indicate still strong N. America and continued stability in China (p. 5-8)
- Falling industrial metals prices a negative worth watching (p. 10)
- Industrial stock valuations are reasonable though (p. 39-41) and few obvious bubbles in our sectors exist today. Funds continue to flow out of industrials. (p. 27)