Several factors may cloud the economic outlook in the first quarter. As would be expected, the full impact of the coronavirus is unknown. In the past week the International Olympic Committee proclaimed that the games will be held in Tokyo this summer; reassuring, but there is nearly a half year until the games begin. Unusually warm winter weather has pushed down utility output, which hits the industrial production (IP) report and retail sales. More important for IP is the fallout from the Boeing 737 Max problem, the production of which is an important part of business equipment spending.
The best signal to follow will continue to be events in the labor market, though that market remains a coincident rather than a leading indicator. The jobs front, and basically across-the-board improvements in the January purchasing mangers’ indexes, are telling a positive story for the first quarter; just how positive, we may not be able to tell until the clouds lift a bit.
This commentary has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) changes in laws and regulations and (4) changes in the policies of governments and/or regulatory authorities. The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Fund holdings are fluid and are subject to daily change based on market conditions and other factors.
Past performance does not guarantee future results.