Manufacturing to remain weak

The yield curve has been flattening (see red line on the above chart).
The blue line shows the purchasing managers delivery index. I use this measure because is less volatile than the total index.
The two lines are absolutely the same. I find it impressive. The message is that a flattening of the yield curve will be followed by much slower growth in manufacturing.
If, on the other hand, the yield curve steepens (the red line starts rising), manufacturing is likely to strengthen.

George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
Author, Profiting in Bull and Bear Markets
No. 1 bond timer in the past 12 months.

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