© Reuters. 4 Industrial stocks soar to new highs
The economic recovery has slowed recently, and it is almost certain that the Fed will not raise its benchmark interest rate in the short term. At the same time, the government is expected to pass a number of spending plans to stimulate industrial production. Therefore, we believe that the popular industrial stocks ABB (ABB), Trane Technology (NYSE:), Otis Universal (NYSE:) and Washington Expeditors International (NASDAQ:) should rise sharply in the near future. Let’s discuss it. In the past few months, industrial production has rebounded at an alarming rate. The phasing out of social distancing restrictions allowed the factory to operate close to full capacity. Therefore, according to the latest report of the Federal Reserve, the total industrial output value for the second quarter ended June 30 increased by 5.5% annually, while the manufacturing output value increased by 3.4% year-on-year. In addition, utility production increased by 2.7% in June.
However, the current 13-year high inflation rate is putting pressure on industrial and manufacturing activities. Nevertheless, the Fed believes that the current level of inflation is temporary, and it is expected that the central bank will maintain a moderate monetary stance in the short term to further boost industrial output. In addition, as Congress is currently debating a number of spending bills to accelerate the current economic recovery, it is expected that the gross industrial output value of the United States will rise further in the next few quarters.
Therefore, we believe that industrial stocks ABB Ltd (ABB), Trane Technologies (TT), Otis Worldwide Corporation (OTIS) and Expeditors International of Washington, Inc. (EXPD) should bring strong upside in the short term.
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