Trying to See 2020

New year, new optimism

The manufacturing sector posted the fifth straight month of contraction in December as the ISM manufacturing index came in at 47.2 (below 50 indicates a contractionary environment). This marks the lowest reading for this index since June 2009, when we were just coming out of the global financial crisis. A big driver for this weakness was Boeing’s suspension of the 737 Max production and the recent GM strike. 

Moral of the story: The manufacturing sector has been plagued by slowing global growth and the trade war with China. However, as we make progress toward a deal with China, the manufacturing sector should see some reprieve in the new year. 

Looking up 

Meeting minutes from the Fed’s December meeting were indicative of more optimism about the state of the US economy. However, the Fed did discuss inflation consistently remaining below the Fed’s 2% target and indicated it might adopt a new strategy in 2020 to address this issue. 

Moral of the story: The FOMC still believes the economy’s risks are tilted toward the downside but the imminent trade deal with China has assuaged some concerns. While the Fed has already signaled it doesn’t plan to change interest rates in 2020, it will be interesting to see how the committee navigates around managing inflation. 

Building momentum 

Presidential candidates are required to disclose their fourth quarter fundraising totals by the end of January with the Federal Election Commission but several candidates with impressive fundraising totals have already been issuing releases on the matter. Here’s how everyone stacks up so far: 

  • Donald Trump: $46m
  • Bernie Sanders: $34.5m
  • Pete Buttigieg: $24.7m
  • Joe Biden: $22.7m 
  • Elizabeth Warren: $21.2m
  • Andrew Yang: $16.5m
  • Amy Klobuchar: $11.4m
  • Cory Booker: $6.6m 
  • Tulsi Gabbard: $3.4m

Moral of the story: It’s interesting to think about the power of the Democratic candidacy once the party comes together behind one single candidate. While Trump single-handedly won the contest this past quarter, the Democrats, cumulatively, have put significantly more money to work than the Republicans at this point, and this doesn’t even include the funds that Michael Bloomberg has at his disposal. Honestly quite excited to see what comes of this election cycle. Getting my popcorn ready for the show.