A picture of various reflation-sensitive markets vs. SPY/SPX
The picture says that equity-centric reflation markets are struggling to regain uptrends relative to the broad SPY/SPX, and indeed are maintaining the downtrends begun at varying points during the summer cool down.
Raw commodities, however, are making a move. Strength in commodities would be an early component of an economically negative Stagflationary backdrop. Later, they’d probably cave in but in driving up costs they’d instigate the Stag.* Let’s see how this develops.
* Last week I was evaluating a specialty Materials company, CMC Materials (CCMP) but backed away from it after reading the most recent quarterly report noting increased raw material input costs for this ‘materials’ company.
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