PPI 16.4%

[SimonPB]

vs expected 12.3 and previous 12.4. About as bad as it could be.

[saash]

I don't really see why that wasn't already priced into the market with all the increases in fuel and energy costs, rate-hikes, wage negotiations. Hasn't the market already reacted to all these escalations? It's little surprise that PPI is high.

[theyoungster]

what does PPI influence?

[SimonPB]

saash, the surprise is just how high it is, above 16 is massive?
youngster, this is factory gate inflation, so will play out into consumer inflation in time. ultimately hits everything.

[_nova]

everything. it means input costs for manufacturing are skyrocketing and that down the line these costs are going to pass through to the consumer. look for more than another 2 rate hikes of 50bp

[#6]

Is it OK to shout "bear market!" yet?

[SimonPB]

what bear market? the local market is just off the all time highs ?

[#8]

I'll take that as a "no" :)

[saash]

The biggest problem is that industry will not be able to just "pass costs on" to consumers at this stage. Which means that those that milked their smaller and medium businesses (instead of lining their coffers, and lowering their gearing) are going to start folding under the pressure. Liquidations and retrenchments loom.

[SimonPB]

sure, with one exception - miners who are doing great and passing on massive increases. And our market is miner based.

[SKALA]

So what should our medium term (say 12 months) investment strategy be?

[SimonPB]

buy things going up, sell those going down.

[Russ]

I hate to think what a tin of condensed milk is going to cost in 12 months time.

[SKALA]

Thanks Simon; easy to understand.

[louisg]

Reuters - Producer inflation excluding basic iron and steel recorded an annual increase of 12.2 percent. Stats S.A. said it calculated the separate figure to illustrate the impact basic iron and steel had on the overall number. Economists polled by Reuters last week forecast that the main PPI number would come in at 12.3 percent.

[kwagga]

Only on the back of commodities though. Bear markets tend to break the back of all industries over time.

[striker]

Can we implicitly trust any numbers coming out of Stats .S.A. ????

[AJDK]

It would be the same as to ask old bob if theres a problem in zim