Energy Costs Stoke Mild Inflation

A preliminary inflation reading from five German states suggests that energy costs are leading consumer prices higher. According to the statistical office in Munich, the states of Bavaria, North Rhine-Westphalia, Hesse, Brandenburg, and Saxony  saw inflation rise to the range of +0.7% – 1.0% in December Y/Y from +0.2% – 0.4% in November versus the year earlier.

 

Petroleum and fuel recorded low double digit gains on an annual basis across most states and heating oil inflated just shy of +10%, while food inflation fell ~3%.

 

As a gauge for Eurozone inflation (at +0.5% in November Y/Y), German CPI does not appear an intermediate term threat in 2010, despite the pressures that rising energy prices will put on consumers and producers. However, unemployment fears in Germany, despite holding at the 8.2% level over the last months, remain a particular concern, which has been confirmed by surveys showing deterioration in consumer and business confidence and a slowing in the services and manufacturing PMI.

 

Interestingly, the DAX is performing in line with the S&P 500 in year-to-date performance, up 24%. The DAX overcame the 6000 line on Monday, not achieved since September 2008. We’re currently not invested in Europe in our model portfolio and very mindful of fundamental and structural issues facing Europe’s weaker and leveraged economies.

 

Matthew Hedrick

Analyst

 

Energy Costs Stoke Mild Inflation - gecpi


GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more