Latest / Markets with Megan: A Quick Financial Markets Update / Manufacturing Surged… Now What? | S3 E118 | 02-04-26

Transcript

Manufacturing Surged… Now What? | S3 E118 | 02-04-26 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: Some good news on the economy.
• 0:02
  Megan Horneman: That's what we received this morning.
• 0:03
  Megan Horneman: It is Wednesday, February the 4th, and this is Markets with Megan.
• 0:07
  Megan Horneman: If you like this podcast, subscribe, hit the alarm bell, share it with your friends, family, or colleagues.
• 0:13
  Megan Horneman: Anybody who's interested in all that economic data that we see, the headlines that surround that, and then what it means for the market.
• 0:19
  Megan Horneman: And it's been a very big whips all day in the market.
• 0:23
  Megan Horneman: We've seen markets up, we've seen markets down, double digits, triple digits, but let's focus on the economic data that we received first thing this morning.
• 0:31
  Megan Horneman: And we got information from the purchasing managers index, both on the manufacturing side of the economy and the service side of the economy.
• 0:41
  Megan Horneman: Now, when we look at this monthly monthly number, we've seen manufacturing deeply in contraction territory for a very long time.
• 0:48
  Megan Horneman: But in the month of January, we actually saw the biggest monthly increase in manufacturing activity since June of 2020.
• 0:56
  Megan Horneman: And if you remember, in June of 2020, that's when we started to see the economy actually maybe get out of some of that, the COVID, a lockdown.
• 1:05
  Megan Horneman: And we saw manufacturing pick up then.
• 1:08
  Megan Horneman: We definitely saw it in January.
• 1:10
  Megan Horneman: It was in expansion territory, and this means it crosses above a level of 50.
• 1:16
  Megan Horneman: It rose into expansion territory for only the third time in the past three years.
• 1:23
  Megan Horneman: So this was definitely good news, especially on the manufacturing side.
• 1:27
  Megan Horneman: Let's look at the components of this index.
• 1:30
  Megan Horneman: All of the underlying components, and this index looks at a lot of different aspects of the manufacturing side of the economy.
• 1:38
  Megan Horneman: All of them rose for the month, with the exception of customer inventories.
• 1:42
  Megan Horneman: But what we focused on was the new orders.
• 1:46
  Megan Horneman: So this is manufacturing new orders.
• 1:49
  Megan Horneman: This has to do with AI, may have to do with uh trade as well, that we've had some of those tensions easing up.
• 1:56
  Megan Horneman: But new orders rose to the highest level we've seen since February of 2022.
• 2:02
  Megan Horneman: So a very good number.
• 2:04
  Megan Horneman: We saw all of these components also except the inventories and the employment component rise above that expansion contraction territory.
• 2:15
  Megan Horneman: So they're expanding.
• 2:16
  Megan Horneman: Employment did improve.
• 2:18
  Megan Horneman: Employment's been deeply negative or deeply in contraction territory for a very long time, but it actually improved quite a bit and is now pretty close to that expansion territory.
• 2:27
  Megan Horneman: Now, when you look at services, so let's look at the service side of the economy.
• 2:32
  Megan Horneman: Um, that was all actually that was also good.
• 2:35
  Megan Horneman: Um, it came in relatively unchanged from the last month, but the trend has been higher.
• 2:41
  Megan Horneman: And it was above 50, that level of expansion versus contraction, for the 19th consecutive month.
• 2:48
  Megan Horneman: The big moves higher in this were in um not only delivery time, so how services are delivering, but also in the broad business activity and then prices paid.
• 2:59
  Megan Horneman: Now, the prices paid, when that does increase, it does move that index higher.
• 3:04
  Megan Horneman: But it's something that we want to keep our eye on because prices paid in both of these indices does warrant some caution when it comes from an inflation standpoint because we have to see if that does filter into the consumer.
• 3:17
  Megan Horneman: That's all we have today.
• 3:18
  Megan Horneman: We'll be back with some more of this week's economic data.
• 3:20
  Megan Horneman: And if you want a history of our podcast, you can go to Marcuswithmegan.fm.
• 3:24
  Megan Horneman: Thank you.