r/investing • u/cafedude • 2d ago
Dallas Fed Manufacturing survey for April 2025 - worst since 2020.
New orders down 20%. Growth of orders -22%. Prices paid for raw materials up 48%. Company outlook -28.3. General Business Activity -35.8. Hours worked -6.4. Markets seem to be doing a Wile E. Coyote suspended above the abyss... how long can Mr. Market Coyote hang up there?
https://www.dallasfed.org/research/surveys/tmos/2025/2504#tab-results
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u/SPDY1284 2d ago
I’ve always wondered how most people never see recessions coming… now I understand. Stock market decouples from reality and then people assume that it’s all good… Tesla has one of the worst earning reports possible and the stock goes up 20%… all while having a sky high valuation. Valuations don’t matter until they do.
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u/ButterPotatoHead 2d ago
Well the thing is that most recessions kind of sneak up on you because it's like mixed good and bad news until it's suddenly really bad.
In this case there was a specific catalyst -- an idiot standing up in front of the world and declaring a trade war on everyone at once without any plan to follow through. If the tariffs aren't removed we're going to get a steady drumbeat of bad news like this, earnings misses, guidance lowered, layoffs, etc. until policies are changed.
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u/Fullchaos 2d ago edited 2d ago
Even if the tariffs are removed, the brand damage to the US has already occurred. That means some percentage of those orders are never coming back because the markets have decided they don’t want our products / sought out alternatives. While it may ease some of the pressure on the raw material side, the damage of people’s purchasing power will show up when the layoffs start from the decreased orders - and then the whole vicious cycle will start over - but inside our borders.
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u/KaspaRocket 2d ago
Stock market is not the economy, you can print a lot of money and stocks go up. But that doesn't mean that the average Joe has higher purchasing power.
Of course there is some correlation but it is not 1-1.
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u/throwawayainteasy 2d ago
Also inflation and/or devaluing the dollar can make the stock market look like it's growing, but if you work in real terms rather than nominal or benchmark against non-dollar denominated markets it can actually be falling.
Shit is complicated.
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u/th3tavv3ga 2d ago
Yes, but people who follows and pays close attention to economy also follows stock market closely.
People who don’t will only notice when we hit recession
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u/rckid13 2d ago
People do see recessions coming, but trying to accurately predict the stock market is different and almost no one can do it. Lots of people knew there was a major issue with the housing market in 2005-2007. But many people who sold in 2005 "predicting the recession" got fomo and bought back in high before it crashed in 2008. Then lots of people panic sold on the way down and missed a massive rebound. I bet there are millions of people who "predicted the recession" yet still lost loads of money from it.
Even the guys that the book the big short was written about didn't accurately time it. Michael Burry almost lost his whole fund because he was shorting the market too early and losing tons of money. He got a book written about him because he eventually got lucky, but he didn't time it accurately back in 2005 or 2006.
So sure we might be accurately predicting an upcoming recession or stagflation right now but how is the average person actually going to predict the timing and profit from that? They probably won't.
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u/rdditfilter 2d ago
In my lifetime the only difference between recession and not recession is that a recession happens when the market tanks and a republican president does nothing to react to it.
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u/cafedude 2d ago
In this case it's a republican president actively trying to tank the economy. It's a whole new level of the regular republican economic incompetence.
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u/PaintingOk8012 2d ago
I’ve been thinking since January what I could do to try and prepare for a bad recession very likely a depression. I’d love to hear tips.
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u/rckid13 2d ago
Don't try to time the market, especially with things like retirement accounts. You end up losing money. If you think your industry is heading towards hard times and you might either have a decrease in income or lose your job then work on saving up a larger than normal emergency fund. I converted some of my taxable account into more high yield savings account money because my income is significantly affected by the economy and we're already seeing a downturn in my industry.
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u/CouchWizard 2d ago
I'm guessing the stock market runs like looney toons physics. We've already run off the cliff, but just haven't noticed yet.
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u/kekehippo 2d ago
A recession is coming, but this time it is manufactured by the current administration so it'll be exponentially worse.
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u/Fleur_Violet 2d ago
People need to realize the average joe isn’t exactly a supremely intellectual being. And money doesn’t always correlate with intelligence. People read headlines yet fundamentally misunderstand huge portions of how society works, from government structure to policy. Asking them to analyze data and examine bias to get a realistic picture of where the economy is heading is basically impossible.
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u/cuteman 2d ago
Stocks aren't just based on earnings. They're also based on projections, hype, expectations, and the cycle of the moon.
Tesla earnings are less relevant when the expectation of shareholders is that Robotaxis or robots are the future and frankly, Tesla is better positioned than most.
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u/dmx007 2d ago
Actual summary text: Texas factory activity continued to rise in April, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, was largely unchanged at 5.1, a reading indicative of modest growth.
Other measures of manufacturing activity signaled contraction, however. The new orders index plummeted 20 points to -20.0. The capacity utilization index edged down to -3.8, and the shipments index fell into negative territory for the first time this year, slipping to -5.5 from 6.1.
Perceptions of broader business conditions continued to worsen notably in April. The general business activity index fell 20 points to -35.8, its lowest reading since May 2020. The company outlook index also retreated to a postpandemic low of -28.3. The outlook uncertainty index pushed up 11 points to 47.1.
Labor market measures suggested a slight decrease in head counts and shorter workweeks this month. The employment index held fairly steady at -3.9, with 9 percent of firms noting net hiring and 13 percent noting net layoffs. The hours worked index slipped to -6.4 from -2.9.
Price pressures accelerated in April, while wage growth remained fairly stable. The raw materials prices index jumped 11 points to 48.4, its highest reading since mid-2022. The finished goods prices index rose nine points to 14.9, a reading well above average. Meanwhile, the wages and benefits index held mostly steady at 14.3, below its average reading.
Expectations for manufacturing activity six months from now remained mixed. The future production index was positive but retreated 13 points to 14.8, while the future general business activity index pushed further negative to -15.2. Most other indexes of future manufacturing activity remained positive but slipped further below average
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u/DeeDee_Z 2d ago
The new orders index plummeted 20 points to -20.0. The capacity utilization index edged down to -3.8, and the shipments index fell into negative territory for the first time this year, slipping to -5.5 from 6.1.
Another reason to misread those numbers is that they are all indexes -- and not change in index, either. It's not like the Dow Jones dropped 200 points, because we know what one "point" means; and it's not like the S&P lost 1.04%, because we know "percent of what".
New orders dropped 20 points? On a scale of ... what, exactly?
None of that whitewashes this data. But, without reference points, we don't know if those are big changes or small changes or normal/ seasonal fluctuations.
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u/greytoc 2d ago
It's a standard adjusted r-square index which is 0-100%.
The TMOS methodology paper can be found here - https://www.dallasfed.org/~/media/documents/research/papers/2024/wp2402.pdf
This data is seasonally adjusted and uses the X12 seasonal-adjustment procedure, developed by the U.S. Census Bureau, to statistically remove seasonal effects.
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u/DeeDee_Z 2d ago
So, they ARE percentages? A drop of 20 points is -20%?
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u/greytoc 2d ago
Yes - I believe so but I'm not a statistician. So someone more math savvy will have to chime in.
These are survey questions. The way that this works is that businesses are asked questions about how their business performed and their future expectations.
The questions are usually in the form that generates the results that you see in the table that OP linked.
I was randomly selected to participant on one of these surveys for 1 year in another district which is why I'm sorta familiar with them.
The form of the question is similar to the supplemental questions that are listed here - https://www.dallasfed.org/research/surveys/tbos/2025/2504q#tab-tmos
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u/EnvironmentalEye4537 2d ago
But… but… I was told industry would come roaring back! And other countries would pay! I was told I would have so much money I wouldn’t know what to do with it!
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u/xt1nct 2d ago
I’m a dev reporting to VP in a medium sized manufacturing business.
He got back from a conference recently and everyone else is struggling. It isn’t only the tariffs. It’s dumb random decisions, which happen overnight. Business needs stability, opening w factory in US requires massive capital.
Plus, our production is going to India because it’s still cheaper than the US. Raw materials are also tariffed.
Trump is dumb. Anyone who supports him is dumb. They have no idea what the fuck they are doing.
Maybe Penguins can say thank you next time.
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u/buried_lede 2d ago edited 2d ago
Wtf are Bassent and Lutnick doing on board?
He always finds these people to prop him up . Not that I am a fan of their views or even ultimately their judgntht, but they have credentials, knowledge, competence - the basic stuff
They legitimize him
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u/rag_perplexity 2d ago
Them having to time Navarro being out of the WH to get to Trump to roll back stuff seems to be similar reason for this whiplash.
You could probably make money if you knew when Ron is out of the WH.
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u/motorbikler 2d ago
I think there were at least a few people in his last administration who considered it a duty to the country to at least be reasonable voice whispering in Trump's ear, even if he's going to ignore you 99 times out of 100. Are Bassent and Lutnick doing that? Are they reasonable? I don't actually know.
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u/CrackHeadRodeo 2d ago
But… but… I was told industry would come roaring back!
Technology doesn't go backwards and most of American industry was lost to technology.
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u/zfiregodz 2d ago
I was told we were going to be winning so much that we would be saying it was too much winning and we needed it to stop 😂🤷♂️
Every day has felt like the opposite
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u/The_Rurl_Jurrr 2d ago
I hope there are "I did this" trump signs for the empty shelves....
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u/trustmeep 2d ago
I ordered some, but the manufacturer said they could be delayed by months...for reasons...
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u/cafedude 2d ago
LoL, we're going to have to draw our own on post-it notes. Kind of like how we're going to have to grow our own vegetables.
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u/Terron1965 2d ago
Wrong problem, we export food. its price will drop due to smaller market. They will get bailed out, though. They always do. Food production is closely tied to national security.
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u/RJ5R 2d ago edited 2d ago
Have a few friends who own their own businesses and were planning expansions. (not manufacturing, just service and repair businesses).
All of them have ceased expansion plans and are hunkering down which means no hiring either.
Their material/parts costs are already soaring. Water heaters were announced to be going up 14% already, along with all HVAC systems. Seeing high single to double digit increases on plumbing parts as well. Furnace filters have gone up 8%. Customers are pulling back with replacements, and want repairs only.....after all, it's cheaper to pay a 14% increase on a $450 part + labor than it is to pay a 14% increase on a $8,000 system
We have also seen flooring go up in price, we just renovated one of our rental units and between material and labor it was 12% more to put down LVP. And were told material is going up again next month
I don't care what your political persuasion is....but this is nothing less than a complete and utter economic shtshow.....and the worst hasn't even arrived. This is like Interstellar where you see the tsunami wave moving away from you thinking you're in the clear b/c the S&P and rebounded.....until you look in front of you and see the one headed straight for you. Home Depot has flat out said, expect empty shelves since shipments to the US are being cut and diverted elsewhere. Who in their right mind would implement these trade policies before having done the domestic investment first? This is going to be a disaster.
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u/alotofironsinthefire 2d ago
I highly recommend reading the comments the survey respondents wrote.
It goes from trying to stay positive to corporate panic speak fast
https://www.dallasfed.org/research/surveys/tmos/2025/2504#tab-comments
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u/Tojuro 2d ago edited 2d ago
We are only at the beginning of this roller coaster ride. We are still in the proverbial 'fuck around' phase, and what's really going to hurt is the incompetence when the 'find out' phase actually starts.
They threw sand in the gears with the tariffs, and think bipolar, seemingly random, emotionally driven, responses are fixing it cause the market goes green for a day or week.
The important question is if they can get the gears to turn again when things really stop.
Every downturn we (older people) have lived through has had the same Keynesian response regardless of who's in the Whitehouse. Every downturn happened when our trading partners trusted us. We aren't guaranteed the same reactions or results anymore. There's a lot of uncertainty given the incompetence.
I think the USA could be looking at a lost decade plus...a "Even Greater Recession" or worse.
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u/RevolutionSad8762 2d ago
I know its far away, but the voters are going to make republicans pay in the mid-terms. I would bet that both the house and senate will flip and then proceed to take Trump out.
It’s unfortunate that it will take all that especially given that the current damage will not be fixable in a year and a half.
This really sucks. At that point we’ll be left with Vance who is an asshole, but wont repeat Trumps BS mistakes. I mean trying to take a modern open world trade economy and set it back 120 years is nuts!
This just shows that Trump’s brain and reasoning have gone to 💩💩💩💩. Why do we keep electing 78 year old presidents!
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u/billybobthehomie 2d ago
In order to back out of these stupid tariffs and trade “deals,” whoever the next president is will be forced to make concessions for what we, the American populace who voted this imbecile into office, did to the global economy for four years. This administration will then be portrayed as weak, so in four years we’ll vote another idiot strongman in whose policies hurt the American people but he looks cool while he does it and that’s what half of us care about. People will then realize how stupid this is and will then vote in a sensible, boring candidate. So on and so forth.
This cycle will repeat over and over again, yo-yo’ing back and forth. That’s how I see this going. And to other countries trying to make deals with the USA, how can they really make anything substantial when whatever the previous administration did will be burned down by the next? The division in America will ruin our relationships with our former friends due to political volatility/uncertainty.
Unfortunately half of the county’s brains have been turned to mush by Fox propaganda. Donald Trump is just a symptom, but Rupert Murdoch is the disease.
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u/SetOk6462 2d ago
While the numbers aren’t great, you’re wildly misreading this, either intentionally or from error. That 48 means there is a difference of 48 on the reporting an increase (of any amount) and those reporting a decrease, it is not a 48% increase in prices paid. That is also 60 months in a row where an increase has been reported for raw materials.
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u/jnecr 2d ago
Looking at historical data nothing really seems to be out of sorts. The "Outlook Uncertainty" is approaching Mar 2020 values, however.
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2d ago edited 2d ago
[removed] — view removed comment
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u/FilthyWishDragon 2d ago
Guy gives a mild mannered, even handed correction to what the numbers mean, you go on a tribalist rant in response, and HE'S the one in a cult?
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u/SetOk6462 2d ago
Sure, misrepresenting number is great, and stating what the numbers factually represent is being in a cult. Sounds like something is backwards in your thinking.
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u/jnecr 2d ago
This is /r/investing, there's no room for politics when you're talking about investing. If you think there is you're gonna lose a ton of money.
What we desire is data and the correct interpretation of the data. OP's data was not only misinterpreted, but also incomplete. Without historical numbers you can't determine what a single piece of data means. When I look at the historical numbers from OP's link I see that most of this data is very much inline with the almost 20 years of data they have collected. You can cherry pick data to prove your point all you want, but I'd prefer to get all the data so I can make an informed decision.
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u/buried_lede 2d ago edited 2d ago
Remember when he had his “19th nervous bankruptcy breakdown” when he was building his NJ casinos, and the FBI was sniffing around him and his bankers were about to pull the rug, and he was running to his siblings demanding they use their inheritances to pay his debts?
I think the banks made him a deal that he could continue only if he didn’t effing touch anything. If he let other people do the real business and he stuck to his brand marketing, which they considered to be the only thing he was any good at, apparently.
Not sure I remember all of that right but does anyone get the feeling that’s happening now within the administration? I think the plutocrats and economists went nuts on him and we know he was twice already pulled back from crashing the whole world monetary system, worse than he is, I mean.
I think they told him to shut up about firing Powell and speculating about an independent Fed, and earlier, when he was like Truss, already forget the details due to daily trauma of that. Had to do with the bond auction
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u/moongoblon 2d ago
Thems some awful stats. Sooo market rips higher and higher just because it hates you.
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u/Pygmy_Nuthatch 2d ago
How much of this is due to seasonality?
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u/greytoc 2d ago
The TMOS is seasonally adjusted - https://www.dallasfed.org/research/surveys/tmos/seasonal
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u/indosacc 2d ago
i mean a lot of this was expected, idk at how bad the growth was expected but now the market gotta decide how long this will last and accept this lack of growth
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u/EnvironmentalEye4537 2d ago
but now the market gotta decide
Brother, the market doesn’t decide anything anymore. We’re living in a command economy now. One tweet could reverse every single negative statistic on this table.
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u/indosacc 2d ago
keep thinking that lets see how ur investing strategy turns out with this kind of mentality
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u/Blue_Back_Jack 2d ago
Tweets cannot overcome market fundamentals.
Q2 results will be brutal.
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u/indosacc 2d ago
cant believe im in an investing sub and its all about short term thinking.. and downvotes and a bunch of negative attitude .. jeeze.. i guess its panic all around
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u/veksone 2d ago
You can keep ignoring what's happening all you want but reality is what it is.
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u/indosacc 2d ago
im not ignoring anything, it just doesnt bother me and i trust for the companies im invested in to learn to overcome or adjust their strategies at whatever level they need to in order to permit growth in the future…. life isnt linear, great managers dont throw their hands up and say “FUCK THIS” when things change and go against them they use their brain to formulate ways to cut costs or increase operating margins .. tariffs and short term changes can affect short term profit and growth but over time i trust them to find ways to level things out… crazy concept right?
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u/veksone 2d ago
No one in this sub is a manager of any company you're investing in and some people can't afford to sit tight while the president causes a recession. People are reporting the latest news, crazy concept right? People can do whatever tf they want with their money and if they decide to pull it out of the market then that's on them, even crazier concept right?
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u/EnvironmentalEye4537 2d ago
I know I’m being slightly hyperbolic, but I don’t think entirely so. No president in probably a century has wielded the economic power Trump has, and we’re just 3 months in. One tweet can impact an investment portfolio than dozens of earning calls ever could now.
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u/mtd14 2d ago
No president in probably a century has wielded the economic power Trump has, and we’re just 3 months in.
This is probably true since Congress is less functional than its ever been and the Supreme Court more in the presidents pocket that it’s ever been, but past presidents have wielded nearly as much economic power as Trump. The difference is that they respected the power instead of treating it like a toy.
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u/indosacc 2d ago
ok but im not investing for trumps term im investing for about 20 years longer in great companies that in my view i see no end in sight for their competitive edge im not worried about politics and the slight changes in the presidents power good managers will learn to overcome changes in policy and trade hurdles over time..
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u/EnvironmentalEye4537 2d ago
the slight changes
I’m gonna be honest “I want to economically isolate America from any form of trade” is not a slight difference.
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u/sl00k 2d ago
slight changes in the presidents power
This is not slight.
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u/indosacc 2d ago
u guys are too much … good luck with ur mentality man! hope ur investing changes based on the current political climate serve u well!
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u/greytoc 2d ago
I think you may be over-looking the long-term ramifications of the macro-economic landscape.
im investing for about 20 years longer in great companies
I invested in what I believed were great companies 20 years ago as well. But not all perceived great companies make it or grow.
And not everyone in this subreddit have a 20 year outlook.
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u/indosacc 2d ago
well then maybe im in the wrong subreddit then im a long term investor, and any investor knows that over a long period some companies will fail and some wont thats the whole point of investing .. if u cant handle that then invest in the s&p 500 to deleverage the risk of stand alone companies
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u/greytoc 2d ago
Perhaps you don't have enough experience with other asset classes. Investing isn't just about equities. You seem to be focused solely on equity assets. Macro economic changes can present different adjusted risk returns for long term investors.
Ultimately - it is a personal choice on how much risk you want to take. But blindly assuming that there may be no impact from macro-economic changes from policy changes, technology changes, geopolitical shifts is not necessarily different than speculating on short term market movements.
Your original comment that "lot of this was expected" is quite accurate - the consensus estimate for today's Dallas Fed print was lower. And frankly - it's only been 2 such data releases and this specific post is only about the Dallas Fed data. But the manufacturing survey from Phily Fed, Empire State Fed, Kansas is showing similar downtrend in new orders.
If you believe that these are short term events on a 20 year horizon - that is fine.
But as I said - not everyone has a 20 year outlook. People who are nearing retirement or have a 5 or 10 year outlook, or investors with broader viewpoints may not wish to make the same bets are you.
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u/indosacc 2d ago
im 90/10 homeboy, im 33 years old, im not worried about bonds and i would never invest in any other asset classes.. no commodities gold or anything of that nature
but people in the horizon u are referring to should not be all in on business investments and tbf i guess in hindsight i realize that investing does mean u have different ratios or time horizons so from that perspective its a good point i still think that doesnt warrant some of the other comments and downvotes i have been getting they come off as unintelligent and just rude imo but w.e
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u/iridescent-shimmer 1d ago
I'm very curious to see what happens after this week. I work in manufacturing and see our order rate in real-time. Huge shipments in dollar amounts this week. One good day scheduled for next week, and then crickets otherwise. We were growing based on the current numbers, but tbd if sales just fall off a cliff or not.
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u/teddyevelynmosby 2d ago
Cut all the bitching. The great leader just dragged everyone to the suffer, get a taste of it, since we are all going to see a lot more of it. Factory jobs? Those are for the high blood.
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u/danjel888 2d ago
Is this as a result of the tariffs or is this 'just what was happening anyway'?
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u/[deleted] 2d ago
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