One Apple chart that has been going down for 10 years is its forward P/E ratio:
Rising gasoline prices push up American’s inflation expectations for the next year:
Currency moves this year:
Food and electricity bills are high. The cost of filling up at the petrol station isn’t coming down much either. The U.S. economy is in trouble and suddenly the job isn’t as secure as it seemed. Maybe that designer handbag and new car aren’t such good ideas after all.
That’s the kind of decision millions of middle class consumers in developing countries are facing these days. That’s bad news for purveyors of everything from jeans to iphones who have enjoyed double-digit profits thanks to booming sales in emerging markets.
Brazil is the best example of how emerging market consumers are tightening their belts. Thanks to their spending splurge earlier this decade, Brazilian consumers on average see a quarter of their income disappear these days on debt repayments. People’s credit card bills can carry interest rates of up to 45 percent. The central bank is so worried about the growth outlook it stunned markets with a cut in interest rates this week even though inflation is running well above target
The latest State Street investor confidence index bears some scrutiny. The overall index dropped in February which would seem to be in line with other sentiment indicators such as The Conference Board’s consumer confidence index and the German Ifo on business thinking.
But the State Street fall was entirely due to bearish Asian sentiment. There were gains in the North American and European regional calculations. Also the overall, North American and European indices all came in above 100 — which means that sentiment remains on the bullish side.
It begs the question of whether Asia is a) lagging b) leading or c) just out there on its own.