While U.S. equity markets slumped last year, the good news for the cyclical industrial sector and ETFs like XLI is that market observers believe there is only a small chance that the U.S. economy sees a recession in 2019.
“Investors are looking for signs that the U.S. economy remains strong. It expanded by 3.5 percent in the third quarter and is expected to grow next year, albeit at a slower pace,” reports Bloomberg. “Some retailers are posting record holiday sales, and consumption — which accounts for around 70 percent of the economy — rose more than forecast in November. A Federal Reserve Bank of New York gauge puts chances of a recession a year from now at around 16 percent, with some investors calling fears of a slowdown ‘overblown.’”
The inflows to XLI in late December trimmed the ETF’s 2018 outflow tally to $781.18 million.
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