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The lagging manufacturing sector may be about to rebound, according to a reliable indicator

November 13, 2019


Chip stocks may be pointing the way to a rebound in the manufacturing economy.

Manufacturing activity has been contracting since the summer, according to the widely watched ISM manufacturing index, but that may be about to change.

Natixis economist Joseph LaVorgna said the performance of semiconductor stocks has diverged sharply from the ISM recently, with the PHLX Semiconductor sector index (SOX) springing higher, while the ISM continues to point lower. Typically the two move in tandem, and the divergence is unusual.

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