This Factory Rebound Isn't Built To Last

Manufacturers wore down their pencils in July. The Commerce Dept. says that producers of durable goods, such as computers, cars, and appliances, wrote up new orders at the fastest clip in 20 years. The financial markets reacted as if the factory sector--and the recovery--were off to the races. Cyclical stocks rallied, bonds sold off on inflation fears, and anticipation of an imminent easing of monetary policy by the Federal Reserve began to fade.

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