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Quarter-End Insights

Our Outlook for Industrial Stocks

The U.S. is still a solid growth market for industrial companies.

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  • The U.S. manufacturing picture remains relatively positive, with industrial production continuing to increase at a mid-single-digit clip and leading indicators still positive.
  • Conversely, European purchasing managers' indexes have turned down sharply. We don't expect most industrial companies to see positive near-term growth in the region. Similarly, China continues to present a critical risk for many manufacturers, although auto sales have rebounded nicely.
  • Despite the slowing growth environment, we believe recent stock-price declines have led to sizable margins of safety for long-term investment in high-quality companies.

 

Adam Fleck does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.