Inflation Runs Rampant Only In The Imagination of Investors

Inflation Runs Rampant Only In The Imagination of Investors

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Inflation Runs Rampant Only In The Imagination of Investors

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The S&P 500 finished the day lower by about 70 bps, off the lows, when it was down about 1%. Nothing earth shaking but enough to get everyone talking about how rising rates are going to kill the market, and inflation once again is rearing its ugly head. So just how much inflation is there? I can think of one commodity that is going up, and that is apparent Oil. Which, I have shown you time and time again,  how it tight the correlation with the CPI and PPI is.

Yes, No, Maybe So?

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Copper

Some critical industrial metals like copper, have gone nowhere over the past year. To, to be honest, the chart doesn’t look so hot and looks like it may be heading lower. Not so good for Freeport (FCX)

copper

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Iron Ore

Iron ore is a critical ingreident in steel.  Again, not so inflationary, either. But that setup looks nice, for a rise at some point, if the dollar doesn’t get too strong. Maybe a positive for Vale, Rio, and BHP.

iron ore

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Gold

Then off course there is gold.

gold

Coffee

Must be coffee? That has to be a good sign for SBUX, right?

coffee

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Sugar

What about Sugar? Definetly not.

sugar

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OJ

Orange Juice? Oh there is a little bit, is Orange Juice to blame for the rapid inflation? Does Coca-Cola (KO) still own Tropicana?

oj

Lumber

Lumber now that is going up.  Not good for the homebuilders like PHM.

lumber

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Cotton

Cotton has a little bit of inflation. Yeah not so good for Haines, (HBI)

cotton

PCE

Of course, there is the PCE which is at 2.6 percent! Strange thing here, is that it hasn’t change since the first quarter of 2016.

Wages

Hourly wages haven’t accerlated since 2016!

 

Even housing costs have remained relatively stable.

I mean do any of these charts speak of rampant inflationary forces taking place in the economy? No, and in some cases, things are getting cheaper! Maybe, I need to do that thing; you know where you remove the scale, and then zoom all the way in and get real close, to make a ten bps rise look monstrous. But, no. That is no what we aim to do here.

So when you find some inflation someone please let me know!

Night!

Mike

 

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Tags: #sp500 #oil #inflation #yields #copper #ironore #steel #sugar #coffee

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This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.

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