- An industrial renaissance in the United States has begun to unfold due to a host of factors, including a changing cost equation relative to China, as well as a boom in the supply of energy at a low relative cost.
- A surge in U.S. energy production is being driven by a fracking and shale boom that helps drive energy prices down and increases jobs and investment here at home. Downward pressure on energy prices also makes it cheaper for manufacturers to return business to the U.S.
- The industrial and energy renaissances should ultimately benefit the U.S. economy in multiple ways; including keeping inflation modest, boosting capital and infrastructure spending, improving job growth, lowering the trade deficit via increased exports, and improving national security.
- The beneficiaries of the industrial and energy renaissance are likely to include consumer discretionary stocks due to lower commodity prices (aided by the stronger U.S. dollar), industrials stocks due to an expected rebound in capital spending, and small capitalization stocks due to their higher domestic exposure.
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