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4/1/2024 2:12:24 PM Eastern Time

Manufacturing Surprise
By Charles Payne, CEO & Principal Analyst

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A surprise in US manufacturing PMI, after 16 months of contraction, has put a lift in bond yields and slowed the stock market.

The ten-year yield is at a very pivotal resistance point. Movement above this level will trigger greater anxiety.

Meanwhile, economic data from China continues to improve with its manufacturing PMI lifting to 13months high. 

Commodities are getting a lift on the news and breaking out.  I know some want more oil ideas, but we have positioned this bounce through commodities, materials, and an oil name too high for new subs to chase.

We are adding to that investment theme.

Long Idea: 3M Company (MMM) @ $93.27
Industry: Industrial; Industrial Conglomerates
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BACKGROUND: 3M Company is a diversified technology company. The Company is a manufacturer and marketer of a variety of products and services. It operates through four segments: Safety and Industrial, Transportation and Electronics, Health Care, and Consumer. Its Safety and Industrial segment include abrasives, automotive aftermarket, closure and masking systems, electrical markets, personal safety, roofing granules, and industrial adhesives and tapes. Its Transportation and Electronics segment includes advanced materials, automotive and aerospace, commercial solutions, display materials and systems, electronic materials solutions, and transportation safety. Its Health Care segment includes health information systems, medical solutions, oral care, and separation and purification sciences. Its Consumer segment includes consumer and home improvement markets, home, health and auto care, and stationery and office. Its brands include 3M Cubitron II abrasives, ACE, FUTURO, Nexcare, Post-it and others.

SKINNY: 3M completed its spinoff of Solventum today. Mike Roman, 3M Chairman and Chief executive officer said, "This is an important day for 3M and Solventum." He added, "Both companies are positioned to pursue their respective growth and tailored capital allocation plans, and I am excited to see both companies succeed as they innovate new solutions and create value for their respective stakeholders." Now 3M can focus on its core business. We see strong potential for the company. Our target is $111. We are not doing an option play as the spread is high, likely due to spinoff.