Sharp takedown of the industrial narrative gap. The bankruptcy data mixed with XLI's 40% rally from April lows is the exact kind of contradiction that gets misread when people fixate on headlines instead of capital flows. That point about expected new orders versus backward looking stress is key, I tracked similar divergences in municipal infastructure projects where current output data looked terrible but forward booking volumes were accelerating. The solid waste FCF spread compression tells me the quality premium got priced out right when fundamentals stayed steady, which is classic late pessimism signal.
Agreed... markets priced the trough. Backward stress met forward order visibility, quality spreads compressed, and capital stepped in (quite fast imo). XLI rallied because pessimism overshot fundamentals. Data lags like always.
Sharp takedown of the industrial narrative gap. The bankruptcy data mixed with XLI's 40% rally from April lows is the exact kind of contradiction that gets misread when people fixate on headlines instead of capital flows. That point about expected new orders versus backward looking stress is key, I tracked similar divergences in municipal infastructure projects where current output data looked terrible but forward booking volumes were accelerating. The solid waste FCF spread compression tells me the quality premium got priced out right when fundamentals stayed steady, which is classic late pessimism signal.
Agreed... markets priced the trough. Backward stress met forward order visibility, quality spreads compressed, and capital stepped in (quite fast imo). XLI rallied because pessimism overshot fundamentals. Data lags like always.