MarketMinder

Headlines

Here we analyze a selection of third-party news articles—both those we agree and disagree with.

Please note: Though we make every effort to source articles from freely available sites, we will also regularly include articles on sites that have limited content for non-subscribers. Doing so is increasingly unavoidable, as more and more financial media is published behind paywalls.


Supply-Chain Issues Mean There’s Less Than Meets the Eye to October Manufacturing

MarketMinder’s View: In pointing out that supply-chain issues—a negative—are driving manufacturing purchasing managers’ indexes (surveys tallying the breadth of growth) up, this piece raises some valid fundamental economic points. It is fair enough to note that, while rising supplier-delivery times normally suggest bustling activity up and down the supply chain, that isn’t necessarily so true today. With ships backed up at ports and deliveries taking far, far longer to reach factories, this suggests the 75.6 ISM manufacturing supplier-delivery time subindex isn’t really as positive as it normally would be. (PMI readings and subindex readings above 50 suggest a majority of respondents reported growth.) However, the article omits the simple fact that the production subindex notched a robust 59.3, the demand components (new orders and new export orders) showed continued growth, and the only contracting category was imports (at 49.1). So the headline reading reflects much more than artificial skew. Moreover, the article misses a simple point investors must weigh: It isn’t just the fundamental impact that sways stocks, but how that relates to sentiment. In that vein, “The ISM includes a collection of anecdotes in its manufacturing reports, and for October nine out of 10 of them mentioned supply problems, one way or another.” Add this to an ocean of major media coverage and CEOs citing this on earnings calls as a headwind, and it becomes rather clear the negative impact of supply-chain disruptions isn’t sneaking up on anyone. That likely means stock prices already reflect their impact, which we think renders the issues a brick in this bull market’s wall of worry.