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The dollar index Friday rose by +0.55% and posted a 2-year high. Friday’s weaker-than-expected Eurozone economic news signals a struggling European economy that is weighing on the euro to the dollar’s benefit. The dollar extended its gains Friday after the US Nov S&P manufacturing and service PMIs increased. Gains in the dollar were limited after the University of Michigan US Nov consumer sentiment index unexpectedly declined.

The US Nov S&P manufacturing PMI rose +0.3 to a 4-month high of 48.8, slightly weaker than expectations of 48.9. The Nov S&P services PMI rose +2.0 to 57.0, stronger than expectations of no change at 55.0 and the strongest pace of expansion in 2-1/2 years.

The University of Michigan US Nov consumer sentiment index unexpectedly fell -1.2 to 71.8, weaker than expectations of an increase to 73.9.

The markets are discounting the chances at 53% for a -25 bp rate cut at the December 17-18 FOMC meeting.

EUR/USD Friday rose by +0.18%. The yen on Friday posted moderate losses after the Nikkei Stock index closed higher, which curbed safe-haven demand for the yen. Also, recent comments from BOJ Governor Ueda signaled the BOJ is in no hurry to raise interest rates, a negative factor for the yen. Losses in the yen were limited after Friday’s news showed that Japan’s National Oct core CPI rose more than expected at the fastest pace in 6 months, a hawkish factor for BOJ policy. Also, the lower T-note yields Friday were supportive of the yen. In addition, safe-haven demand for the yen remains strong due to the escalation of the Ukraine-Russian war. Friday’s Japanese Nov PMI news was mixed for the yen.

Japan Oct national CPI eased to +2.3% y/y from +2.5% y/y in Sep, right on expectations. However, Oct national CPI ex-fresh food and energy rose +2.3% y/y, stronger than expectations of +2.2% y/y and the largest increase in 6 months.

The Japan Nov Jibun Bank manufacturing PMI fell -0.2 to 49.0. However, the Nov Jibun Bank services PMI rose +0.5 to 50.2.

December gold (GCZ24) Friday closed up +37.30 (+1.39%), and December silver (SIZ24) closed up +0.395 (+1.28%). Precious metals Friday rallied moderately, with gold posting a 2-week high. Escalating tensions in the Ukraine-Russia conflict have boosted safe-haven demand for precious metals after Ukraine said Russia launched a new hypersonic ballistic missile into the city of Dnipro. Also, demand for gold as a store of value increased on Friday after weaker-than-expected Eurozone economic news boosted the chances for a larger 50 bp rate cut by the ECB next month.

Friday’s rally in the dollar index to a 2-year high was bearish for metals prices. Also, Friday’s rally in the S&P 500 to a 1-week high curbed safe-haven demand for precious metals. Silver prices were also undercut after the Eurozone Nov S&P manufacturing PMI fell more than expected, and after Q3 German GDP was revised lower, negative factors for industrial metals demand.

On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policyhere.

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Unlike large-scale manufacturers catering to mass markets, niche players focus on producing specialized, tailored products. This industry is poised to benefit from improving supply chains, resulting in easier availability of raw materials and faster deliveries.

Given this positive sentiment, it might be wise for investors to consider investing in quality industrial manufacturing stocks Corning Incorporated , Littelfuse, Inc. , and Watts Water Technologies, Inc. , which are driving both innovation and economic growth.

As per the Deloitte report, this fiscal year 2024, investment in U.S. manufacturing has led to longer-term growth. There have been 54 new clean-technology-manufacturing facilities announced during the year through September, representing over $15 billion in investment, which is expected to create more than 15,000 new jobs.

One of the major growth drivers for niche manufacturing is technological advancement. By incorporating automation, AI, and 3D printing into production processes, these manufacturers can meet complex requirements while maintaining efficiency and scalability.

According to an industrial outlook survey, approximately 86% of manufacturing executives responded that smart factories will be one of the main competitive advantages in the next five years.

The global smart manufacturing market is estimated to reach $479.17 billion by 2029, exhibiting a CAGR of 15.5%. Therefore, the outlook for niche manufacturing remains optimistic, with rising demand in industries that require specialized expertise.

Now, let’s take a closer look at the fundamentals of the three Industrial - Manufacturing stocks, beginning with the third choice.

Stock #3: Corning Incorporated (GLW)

GLW is a materials science technology and innovation company. The company operates through five segments: Optical Communications; Display Technologies; Specialty Materials; Environmental Technologies; and Life Sciences.

On October 28, AT&T Inc. and GLW together signed a multi-year purchase agreement. Under this agreement, GLW will provide next-generation fiber, cable, and connectivity solutions to support the expansion of AT&T’s fiber network and help bring high-speed internet.

On August 1, GLW and Lumen Technologies, Inc. announced a supply agreement on next-generation fiber-optic cable to support data center AI demands. With this agreement, Lumen reserves 10% of GLW’s global fiber capacity for each of the next two years to interconnect AI-enabled data centers. This agreement makes it GLW’s first outside-plant deployment new gen-AI fiber and cable system.

For the third quarter of 2024, which ended on September 30, GLW’s net sales increased 6.9% year-over-year to $3.39 billion. The company’s operating income for the quarter amounted to $302 million, representing an increase of 28% year-over-year.

Its core net income stood at $465 million, up 20.5% year-over-year, while its core earnings per share rose 20% from the prior year’s quarter to $0.54. Also, GLW’s adjusted free cash flow grew 18.7% from the year-ago value to $553 million.

The consensus revenue estimate of $3.76 billion for the fiscal fourth quarter (ending December 2024) represents a 14.8% increase year-over-year. The consensus EPS estimate of $0.56 for the current quarter indicates a 42.5% improvement year-over-year. The company has an impressive earnings surprise history; it surpassed the consensus revenue estimates in each of the trailing four quarters.

The stock has gained 69.1% over the past year and 48.2% over the past nine months to close the last trading session at $47.84.

GLW’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

GLW has an A grade for Growth and a B for Momentum and Sentiment. It is ranked #13 out of 35 stocks in the B-rated Industrial - Manufacturing industry. Click here to see the additional ratings for GLW (Value, Stability, and Quality).

Stock #2: Littelfuse, Inc. (LFUS)

LFUS designs, manufactures, and sells electronic components, modules, and subassemblies worldwide. The company operates through three segments: Electronics; Transportation; and Industrial.

On October 22, 2024, LFUS announced the launch of RCMP20 Residual Current Monitor Series for Mode 2 and Mode 3 EV charging stations. This launch features the largest Current Transformer (CT) aperture in the industry, and the RCMP20 Series enhances LFUS’ growing portfolio of EV infrastructure solutions.

In the fiscal third quarter that ended on September 30, 2024, LFUS’ total net sales amounted to $567.39 million, while its Industrial segment net sales grew 6.6% from the same period last year to $91.82 million. The company’s net income came in at $58.1 million, up marginally year-over-year, and its EPS stood at $2.32, representing a marginal increase year-over-year.

Street expects LFUS’ revenue for the fiscal first quarter (ending March 2025) to increase marginally year-over-year to $543.47 million. Its EPS for the same period is expected to register a 16.5% growth from the prior year, settling at $2.05. In addition, it surpassed the consensus EPS estimates in each of the trailing four quarters, which is promising.

LFUS shares have surged 43.6% over the past year and 34.5% over the past nine months to close the last trading session at $238.66.

LFUS’ bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.

It also has a B grade for Stability, Sentiment, and Quality. Within the same B-rated industry, it is ranked #8. Click here to see LFUS’ ratings for Growth, Value, and Momentum.

Stock #1: Watts Water Technologies, Inc. (WTS)

WTS is a global supplier of products, solutions and systems that manage and conserve the flow of fluids and energy into, through and out of buildings in the commercial, industrial, and residential markets.

On October 28, demonstrating its commitment to returning value to shareholders, the company declared a quarterly dividend of $0.43 per share, up 35% from the previous quarter, payable to its shareholders on December 13, 2024.

WTS pays an annual dividend of $1.72, which translates to a yield of 0.83% at the current share price. Its four-year average dividend yield is 0.72%. Moreover, the company’s dividend payouts have increased at an impressive CAGR of 17.3% over the past three years.

WTS’ net sales for the third quarter (ended September 29, 2024) increased 7.8% year-over-year to $543.60 million. Its gross profit stood at $257.10 million, indicating a 9.7% growth from the prior-year quarter.

Its net income rose 5% from the year-ago value to $69.10 million, while its net income per share stood at $2.06, up 5.1% year-over-year. Also, the company reported free cash flow of $204.20 million, indicating a 12.3% growth from the prior year’s quarter.

Analysts expect WTS’ revenue and EPS for the current year (ending December 2024) are expected to grow by 9.4% and 5.7% from the prior year to $2.25 billion and $8.74, respectively.

Over the past three months, the stock has surged 13.7%, closing the last trading session at $210.80.

It’s no surprise that WTS has an overall rating of B, equating to a Buy in our POWR Ratings system. It has a B grade for Momentum and Quality. Out of 35 stocks in the Industrial - Manufacturing industry, WTS is ranked #7.

Beyond what is stated above, we’ve also rated WTS for Growth, Value, Stability, and Sentiment. Get all WTS ratings here.

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GLW shares were trading at $48.45 per share on Friday afternoon, up $0.61 (+1.28%). Year-to-date, GLW has gained 63.84%, versus a 26.42% rise in the benchmark S&P 500 index during the same period.