Thursday, September 4, 2014

Lots of Bumpers (excerpt)

Auto dealers sold a bumper crop of vehicles during August. They sold 17.5 million units (saar), up from 16.5 million units during July. We aren’t surprised given that railcar loadings of motor vehicles rose to a new cyclical high during August. The economy is chugging along and barreling down the highway. No wonder that manufacturing is doing so well, as I discussed yesterday.

So why aren’t commodity prices reflecting this strength in the US? The rest of the world isn’t doing as well. The Eurozone and Japan are noticeably weak, while China is slowing. Meanwhile, commodity producers have increased their capacity to produce more commodities and are doing so. Remember: The best cure for high commodity prices is high commodity prices.

Today's Morning Briefing: Bumper Crops. (1) No shortage of beans. (2) The commodity “super-cycle” wasn’t so super. (3) Old adage from the pits. (4) Message from the commodity pits: Ample supplies and slow global growth. (5) Food and energy inflation heading lower. (6) We still recommend underweighting Energy and Materials. (7) Stronger dollar and weaker commodities tend to tango. (8) Gold’s message. (9) Fewest bears since 1987! (10) From nothing to fear to some things to fear. (11) US is rolling down the highway. (12) Focus on market-weight-rated Autos. (More for subscribers.)

No comments: