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Manufacturers know

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Remember this prediction from a previous Brief here?

Based on its amazing correlation we predicted a recession in 23Q4 and into 2024. Here is another amazingly reliable correlation:

PPI (Producer Price Index) is a measure of inflation at the wholesale (manufacturer) level. When factories start to drop their prices, we might suspect something. The graph shows that PPI predicts the movement of retail sales very accurately four months in advance; that’s how much the PPI is shifted to the left (back in time) above. Does it look a lot like the right end of the first chart?

Based on this data, we can expect considerable drop in sales, earning, and even higher than the current historically expensive P/E ratio, outside of value stocks and commodities.