By: Scott Davis
Folks, in the link below please find our latest Melius Macro Views slide deck. Key takeaways below:
- 3Q is tracking ahead of guidance, with a record number of positive industrial pre-releases in the last month. Rising COVID cases do not appear to have derailed the recovery outside the most pandemic-impacted markets.
- Short cycle ISM and our Melius Sentiment Index are both still in strong expansion territory, with the latter moderating from unsustainable levels.
- Key cycle indicators credit, commodity prices and inventories all remain constructive.
- Street estimates are well off lows, but history suggests further upside. Institutional interest is returning to industrials, but sell-side sentiment has yet to catch up. Industrial stock performance continues to lag historical recoveries, however.