The Stock Market’s Petty Disagreement with Reality

by

Picture this: You’re at a dinner party and someone insists the sky’s neon green. You look up, it’s clearly blue. But they keep insisting. That’s basically what’s happening with the ISM manufacturing data and the S&P 500 right now. The oldest industrial indicator in America says “recession,” while the stock market yells “all-time high!” through a megaphone. And not just any megaphone – the kind that still uses actual megaphones because it’s “vintage.”

When Your Economy Can’t Agree on Basic Facts

Since 1948, this awkward social situation has occurred exactly three times: 2023-2024, 1995-1996, and 1984-1985. Imagine going to a family reunion and finding out your cousin’s new fiancé is literally the same person who spilled wine on your white couch in 1985. That’s three strikes of a particular economic oddity.

Now before you start selling your grandmother’s pearls into this chaos, consider two things. First, manufacturing’s economic influence has dwindled like a cheap cotton shirt in the dryer. It was 25% of GDP when the PMI started – now it’s under 10%. It’s like getting upset when the guy at the gym who always grunts loudly doesn’t RSVP to your birthday party. He was never really your friend anyway.

Second, the current manufacturing slump is basically a post-vacation fridge: everyone overstocked during the supply chain crisis and now we’re stuck with three jars of expired kimchi and a half-bottle of vermouth. Manufacturers are trying to offload this inventory like my neighbor trying to give away his secondhand elliptical machine. “Just take it!” he yells. We’re all just ignoring him.

Advertisement

Here’s the twist: Customer inventories are now “too low” according to the PMI. It’s the economic equivalent of realizing your Netflix password-sharing circle has shrunk to just you. Companies will have to restock eventually – it’s like when you finally admit you need more toilet paper after seeing the last roll’s sad, crumpled state.

Investor Etiquette 101

If you’re sitting there worrying about AI valuations while ignoring actual factories, you’re like the guy who brings a casserole to a steakhouse. History says industrial stocks might be the uninvited guest who ends up stealing the show. Those capacity investments from 2025? They’re the awkward college friend who suddenly becomes interesting after learning to play the saxophone.

So should you panic? No. Should you quietly start eyeing industrial stocks while pretending you’re just “checking your phone”? Absolutely. It’s the financial version of grabbing the last slice of pizza when someone’s in the bathroom. Perfectly acceptable etiquette, and you’ll be thanking yourself later 📈

Read More

2025-12-22 00:34