Posted by DigiNomad on 14th of May 2024 at 11:06 am
I guess market got my memo yesterday.. played out exactly as
described for a hot print. One more to go...
A hot PPI makes a weak CPI potentially a double negative. Makes
more sense if you think of CPI as revenue and PPI as COGS even
though it's not a perfect analogy.. Ideal investor environment is
when COGS are not growing and you're able to raise prices (CPI).
The result is earnings expansion without needing to increase
quantity of sales. Things get trickier with hot PPI. A weak
CPI would now suggest that inflation pressures are intense but it's
harder to pass costs on to consumers.
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I guess market got my
PPI (MoM) For April 0.5% Vs 0.3% Est.; -0.1% Prior
Posted by DigiNomad on 14th of May 2024 at 11:06 am
I guess market got my memo yesterday.. played out exactly as described for a hot print. One more to go...
A hot PPI makes a weak CPI potentially a double negative. Makes more sense if you think of CPI as revenue and PPI as COGS even though it's not a perfect analogy.. Ideal investor environment is when COGS are not growing and you're able to raise prices (CPI). The result is earnings expansion without needing to increase quantity of sales. Things get trickier with hot PPI. A weak CPI would now suggest that inflation pressures are intense but it's harder to pass costs on to consumers.