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.
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.
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.
Unilever (UL) is the second largest consumer goods company in the world after Procter & Gamble (PG) and manufactures everything from ice creams to shampoos. Unilever is the global leader with close to a 50% share of the grocery market and sells under well-known billion-dollar brands such as Knorr, Hellmann’s and Ragu.
THE Wall Street Journal reports that some high-flying commodities have gone into retreat in recent weeks:Cotton has pulled back 17% from the all-time record set in early March, and sugar is down 34% from its multidecade high in February. Lead and zinc have tumbled in recent weeks after shooting up in the second half of 2010. Copper has shed 6% this year.
Tom Malthus submits:As the old adage goes smoke before fire; historically a sharp plunge in shipping prices would be the smoke warning investors of an approaching global economic slowdown, but this time it’s not the case. The Baltic Exchanges Baltic Dry Index (BDI) has collapsed falling nearly 34% since the start of December, and nearly 66% since its 2010 peak in May. So why is it different this time and, unless you are overweight shipping stocks, more or less irrelevant?
A month ago, when we reported that Abe's reflation effort was "succeeding" if maybe a little too much by sending gasoline prices through the roof, the Nikkei's conclusion was that "Households are beginning to feel pinched by the weaker Japanese currency." Today they are pinched that much more as we find that the effectiveness of the plunging Yen has just forced luxury titan LVMH to hike prices in Japan by the most ever.
If Bernanke is looking for inflation under every rock and cranny, he may have just found it in today's PPI, if only in its energy components. While the headline June number was expected to jump sequentially by 0.5%, the same as May, the final print came at 0.8%, or 2.5% on a Y/Y basis - the highest since March 2012 - driven entirely by Energy good prices, which soared by 2.9% sequentially, the most since February's 3.2%.