Manufacturing activity held up last month as international trade tensions eased, but investors should look past the latest economic data and brace for a hit to the sector from the coronavirus outbreak.
The Institute for Supply Management said its purchasing managers’ index, a closely watched gauge of industrial health, registered at 50.1 in February. That’s down from 50.9 in January but still above the key 50 mark, which separates expansion from contraction. A separate manufacturing indicator released Monday, compiled by IHS Markit, also held above 50 last month. (It came in at 50.7.)
Following their worst week since the financial crisis, U.S. stock indexes stabilized Monday morning. The S&P 500 added 1.4% while the Dow Jones Industrial Average rose 1.6%, leaving year-to-date losses at 7% and 10%, respectively.
While the latest manufacturing surveys still show modest expansion, supply-chain disruptions related to coronavirus have yet to show up. What’s more, continuing problems related to Boeing’s production halt of its 737 MAX jet and lingering, if diminished, trade uncertainty are still lurking as manufacturing threats.
Read the full article here: https://www.barrons.com/articles/u-s-manufacturers-are-sounding-coronavirus-alarms-the-hit-will-show-up-next-month-51583165937