The market opened with a little steam in the engine this morning, but that juice is fading. Most of the indices now have turned from green to red. One tip-off that the market might be getting low on energy is the VIX. It is in the green, although it is still sitting in the 15-16 range. No surprise if the market ends its 4-day up streak today. Overall, though, the market looks stable, just waiting patiently for news from Europe …
US wholesale companies cut back on restocking in June as sales fell by most in 3 years.
The above data point deserves a big, “So what?” Given all the data out about the second quarter, this “news” was expected. Then again, it also deserves a big, “Wow!” A decline in wholesale restocking when sales fall is normal, but the exciting part of the news is that it means the restocking will come back strongly for the fall and winter shopping coming down the line. Look for opportunity in this area sooner rather than later …
Some American manufacturers are enjoying a rebirth fueled by the return of overseas production back to the United States. As factories crank up, they have an urgent need for high-skilled workers such as machinists and tool-and-die makers knowledgeable in computers.
As I see the world through my positive frame, information such as the above only reinforces my proposition that the US economy will turn up strongly in the near future. It will rise up and out from it its anemic post-recession recovery, and once it does, it will grow at a decent clip again.
As I have said, the US economy is its fourth great historical transformation, and part of that transformation is the shift from hands-on manufacturing to computer/software based manufacturing. In the last three years, many manufacturers and other businesses have spent money on coming into the 21st century. US businesses have made a great investment in updating infrastructure. During this time, manufacturers/businesses put hiring on hold, but that “hold” is now ending. Qualified workers are urgently needed, as seen by the statistic I gave you yesterday – U.S. job openings rose to a four-year high in June. The problem now is there are not enough qualified workers to fill the “new” jobs. Never fear, though, as once again America rises to the occasion.
Trade schools nationwide are bursting at the seams as demand for skilled factory workers pushes enrollment to record highs.
In Indiana, for example, the need is particularly acute, but the current educational system is adapting and doing what it should do – turning out qualified workers.
“The No. 1 comment I’m hearing right now from manufacturers in northeast Indiana is that 5% to 10% of jobs are going unfilled because of lack of skilled workforce,” said Matt Bell, president of Corporate College, a unit of Ivy Tech Community College of Indiana. All 26 Ivy Tech campuses across the state teach certificate courses in manufacturing skills, such as computer-aided manufacturing, welding, and tooling. Bell estimates that the state needs about 40,000 to 50,000 manufacturing workers right now to meet the uptick in production.
Note the words, “uptick in production.” The US economy is far from dead. It would be wise to begin looking for opportunity in almost anything but US Treasury bonds and gold.
Trade in the day; Invest in your life …
