Weak NY Manufacturing

Dec 15, 2025

It was a light morning for economic data to start the week. One of the two releases was the New York Fed’s monthly Empire Manufacturing Survey.  After coming in at 18.7 in November, the second highest reading since April 2022, the index pulled back sharply to contractionary territory in December.  Albeit back into contraction, there was a lower reading as recently as September.  Countering that negative outlook for the region’s manufacturers was solid six month expectations.  As shown below (red line), expectations continued to climb in December with the 16.6 point month-over-month jump, ranking in the 96th percentile of all monthly moves on record.  Additionally, that is at the high end of the past few years’ range and nearly back to the historical median.

Looking under the hood, the weakness in the headline index comes on broad declines across most categories for current conditions.  In fact, of the eleven indices including general business conditions, only two rose month over month.  Further, eight of the eleven experienced bottom quartile monthly declines, which has resulted in roughly half of categories sitting in contraction.

Again, expectations were much better. Not a single category fell into contraction in December. In fact, the lone category formerly in contraction, Supply Availability, moved back into expansion.  As all expectation readings are now expansion, six of the eleven saw top quintile monthly gains. That includes big moves higher from ever-important categories like new orders, shipments, and unfilled orders. In other words, the December survey indicates that the region’s businesses observed weakness, but don’t see that weakness to be lasting.

To help quantify just how large of a disconnect there has been between current and future indices, below we show averages of those categories going back through the history of the survey. As shown, expectations generally hold a positive bias and it has been rare for current condition indices in aggregate to come in stronger than future expectations. That most recently happened this past May, and in 2022 before that, but as of December, things have shifted the opposite direction.  The spread between current and future categories is now at the widest level since January. Compared to one month ago, that spread fell 0.93 standard deviations, which ranks in the first percentile of all monthly moves over the survey’s history. That means it was a historic month for shifts of positive expectations and negative current conditions.

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Cisco (CSCO) Returns to Dot Com Highs

Dec 11, 2025

At yesterday’s close, something happened that hasn’t in over a quarter of a century: Cisco (CSCO) closed at a record high. As shown below, the stock’s Dot Com era peak of $80.06 had stood in place for more than 25 years.  While a hypothetical investor who bought right at the 2000 peak may finally see their share price in the green, we would note that the company’s valuation as of yesterday’s close is far smaller than it was back then (a $317 billion market cap versus $550 billion in 2000).

Cisco is not the only mega-cap of yesteryear to have recently touched fresh records. Back in September, General Electric (GE) finally eclipsed its August 28, 2000 high of $287.17.  The stock continued to rally up through late October when it stalled out at $314.28 and today is back in the $280 price range. Again, like CSCO, General Electric may finally be in the green on a price basis, but its market cap remains a couple hundred billion dollars less from where it was in the year 2000.  In fact, it’s not even back to levels it stood at during the Financial Crisis.  This comes as GE has undergone a number of restructurings, divestures, and the likes in the past couple of decades. Whereas the company in the 2000s was an enormous industrial conglomerate, today GE is primarily its aerospace business. In other words, it is hard to compare GE of today to GE from 2000.

The Dot Com Era’s peak came in March 2000 when the tech-heavy Nasdaq hit its high.  Using 3/10/2000 as the reference point, below we show the 10 largest stocks in the Russell 1,000 from that time.  At the top of the list, the name should look familiar given it remains one of the world’s largest companies today: Microsoft (MSFT).  This dominant stock has rallied over 700% since its late 1999 high although it had been in the red versus that peak up until October 2016. The next two largest stocks from back then are also the two that most recently returned to prior highs: CSCO and GE. Given this development, there are now only two former top 10 stocks that have yet to return to their 1999/2000 highs: Intel (INTC) and Nokia (NOK).