(C) Reuters. 4 Industrial Stocks Surging to New Highs
The recent slowing in the economic recovery makes it almost certain that the Fed will not raise benchmark interest rates anytime soon. Meanwhile, the government is expected to pass multiple spending packages that will bolster industrial production. As a result, we think popular industrial stocks ABB (ABB), Trane Technologies (NYSE:TT), Otis Worldwide (NYSE:OTIS), and Expeditors International of Washington (NASDAQ:EXPD) should gain substantially in the near term. Let’s discuss.Industrial production has been rebounding at an extraordinary pace over the past few months. The phasing out of social distancing restrictions is allowing factories to operate near full capacity. As a result, total industrial production increased at a 5.5% annual rate in the second quarter, ended June 30, while manufacturing output rose 3.4% from its year-ago value, according to the latest Federal Reserve report. Also, utility production increased 2.7% in the month of June.
However, the current 13-year-high inflation rate is putting pressure on industrial and manufacturing activities. Nevertheless, the Fed believes current inflation levels to be temporary and the central bank is expected to maintain its dovish monetary stance in the near term to boost industrial output further. Furthermore, with Congress currently debating multiple spending bills to accelerate the current pace of economic revival, total U.S. industrial production is expected to rise further in the coming quarters.
Therefore, we think industrial stocks ABB Ltd (ABB), Trane Technologies (TT), Otis Worldwide Corporation (OTIS), and Expeditors International of Washington, Inc. (EXPD) should deliver solid upside in the near term.
4 Industrial Stocks Surging to New Highs
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