By
Matt Koppenheffer
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October 17, 2011
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The big macro can cause big moves in the market. What does today's headline macro news mean for your portfolio?
What's happening: The U.S. Federal Reserve reported that industrial production was up by 0.2% in September, matching the market's expectations.
In plain English, please: Manufacturing and other industrial outputs are key indicators when it comes to gauging the health of the U.S. economy. Of late, though, they have been stress-inducing indicators since some measures have appeared to show the sector faltering after strong post-recession gains.
The upside for September's growth is that, well, it's growth. Creating jobs and getting that ugly unemployment rate back down to a more palatable level is a primary issue, so the last thing we want to see is U.S. manufacturers ratcheting down production. From the market's perspective, it also helps that the growth rate matched expectations. On the downside though, the Fed adjusted its numbers down for August, now saying that industrial production for that month was flat, as opposed to the 0.2% growth that was reported previously.
Stocks to watch: We need to be careful here because one month's numbers may not mean a whole lot for individual companies, particularly when it comes to industries with lumpy sales trends. That said, drilling down on the top-line growth number shows that production of autos, civilian aircraft, and computers and electronics were all strong, as was the output from mining operations, particularly energy-related miners. From there we could connect the dots to a variety of potential beneficiaries including Ford (NYSE: F ) , GM (NYSE: GM ) , Microsoft (Nasdaq: MSFT ) , Apple (Nasdaq: AAPL ) , Boeing (NYSE: BA ) , and Peabody Energy (NYSE: BTU ) .
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