However, inflation can be good for companies that have the pricing power, so we try to look through the industry breakdown in PPI for clues as to who those companies may be.
For example, fruit and vegetable canning continues to exhibit strong pricing power:
Meanwhile, corrugated box pricing has rolled over.
When combined with a slowdown at the consumer level, we think this could be bad news for the transportation companies that will have fewer boxes to move around.
Just when we were ready to give up the ghost, the weaker industrial gas prices appears to have broken through to Air Products (APD):
Industrial valve prices are telling us to be patient with Curtiss Wright (CW):
Finally, we have to point out the semiconductors. A price increase is unheard of in this industry, yet supposedly there was one. This is definitely the first we’ve heard about it, but it is worth pointing out just in case.
It would certainly make the market appear less bullish than we had thought.