Industrial Production Rises 0.4% in November

The stock market is up today after four days in a row of losses. The declines, however, have been quite modest. We’re still within earshot of a new all-time high.

The Federal Reserve begins its meeting today. We’ll get the policy statement tomorrow afternoon followed by Chairman Powell’s press conference. I doubt the Fed will actually do anything, but it may update its guidance on buying bonds.

The Fed is currently gobbling up $80 billion in Treasuries each month, plus another $40 billion in mortgage-back securities. The amounts will probably stay the same, but the Fed may discuss the timetable at which they’ll pare back their purchases.

At the Fed’s last meeting, they made it clear that they’re going to keep interest rates low through 2023.

This morning’s report on industrial production showed an increase of 0.4% for November. We’re now 5% from the pre-pandemic peak.

Manufacturing was up 0.8% in November, its seventh consecutive monthly gain, with last month’s increase boosted by a rebound in auto production. Production of motor vehicles and parts rose 5.3%, the biggest monthly increase since a 31% surge in July. However, after that jump following spring lockdowns, auto production fell in August, September and October.

Output in the mining sector, which includes oil and gas production, rose 2.3% while utility output fell 4.3%, a decline that reflected unseasonably warm weather in November.

U.S. industry operated at 73.3% of capacity in November, still below the pre-pandemic rate of 76.9% in February.

On our Buy List, Trex (TREX) finally took out its high from October. The shares are at a new 52-week high this morning. We have a gain of more than 82% in Trex this year.

Posted by on December 15th, 2020 at 10:51 am


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