From Praxis to Practice-Changing; Initiating at Overweight

Global manufacturing posted a strong 3.6%ar 1H26 gain, supported by the global tech upswing and a broader non-tech pickup in 2Q. Recent production data point to a moderation to roughly a 2%ar pace in 3Q. The signals about the path forward are mixed. While China output gains appear to be gathering momentum, a slowing in the US and Western Europe has taken hold in recent months. On the demand front, our proxy for global capex remains strong and aligns with continued boomy readings on tech exports from Asia, but consumer goods spending looks to be slowing. Through these cross-currents, the guidance from the business surveys is that activity is continuing to rise at a solid pace. We maintain our forecast for a strong 3%ar rise in global IP this quarter.