Emerging markets will remain in focus this week as the world watches anxiously to see if China’s move to devalue the yuan will ultimately transform an already precarious situation into an outright crisis. Slowing demand from China has been the major concern for commodity exporters and indeed, wide open capital markets (thanks to ultra accommodative monetary policies across the globe) have served to keep struggling producers afloat, perpetuating a global deflationary supply glut.
NEW YORK: Apple weighed heavily on all major US stock indexes on Tuesday as it fell for the fifth straight day, while oil steadied a day after a broad measure of commodity prices hit a 12-year low. Apple stock, down 3.1 per cent on Tuesday, is off near 15 per cent from its record high set in late April. Stocks and the dollar were little changed. US crude rose and copper edged up but the outlook for commodities continued to be clouded by concerns over a slowdown in China, the world's second-largest economy.
Submitted by Gail Tverberg of Our Finite World blog, If oil is “just another commodity,” then there shouldn’t be any connection between oil prices, debt levels, interest rates, and total rates of return. But there clearly is a connection.
Michael Fitzsimmons submits:The world’s economy is powered by oil. Although coal produces most of the world’s electricity, there are alternatives in electric power generation: nuclear, solar, natural gas, and wind. But the cars and trucks that enable personal transportation, the transport of goods, and the mining of Earth’s raw materials, are all predominately fueled by derivatives of oil – gasoline and diesel.
Click here to follow ZeroHedge in Real-time on FinancialJuice Don’t you just hate the smuggish guys that sit behind desks and that say ‘I told you so’? There’s probably only one thing you hate more and that’s the racers that are running to predict the end of the world. Doom and gloom. The financial world that is!
Inflation was a big story in 2013 because it was so surprisingly low. Inflation could be the big story once again in 2014 as it could be the year when it comes back in a big way. For some context here's a chart of current inflation rates around the world from market guru Richard Bernstein.
Previously, I’ve observed that S&P 500 revenues are highly correlated with both world industrial production and world exports. The same goes for these revenues and the CRB raw industrials spot price index. I am predicting that revenues will be up 5%-7% this year and next year.