Core inflation is now rising at its fastest pace in 16 years. Which companies are best able to navigate this treacherous trend?
Core inflation, which strips out volatile food and energy prices, rose twice as fast as expected and hit its fastest annual pace in more than 16 years, the Labor Department reported Tuesday.
"Nothing here bodes well for consumers." said Joel Narof, president at Naroff Economic Advisors in Holland, Pa. "It's putting more pressure on businesses to raise their costs. This is problematic in an economic slowdown we are in right now."
In this kind of environment look for irreplaceable inputs, adds River Twice Research president Zach Karabel. I mean things people absolutely have to have.
Iron ore is a good example because you can’t make steel without iron ore. My trade is iron ore producer Vale .
Another irreplaceable input is a brand, Karabel explains. Think about Tiffany or LVMH Moet Hennessy Louis Vuitton because nothing can replace that little blue box or Vuitton hand bag. Also the high-end consumer isn’t that sensitive to the price of gas.
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Trader disclosure: On May 20, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami owns (NUE), (BTU),(MSFT),(INTC),(C ), (GS), (AGU); Najarian Owns (AAPL), (NOK), (DRYS), (HPQ), (XLF) Puts; Macke Owns (INTC), (HAS), (DIS), (WMT), (MSFT); Terranova Owns (SUN), (FXC), (GS), Crude; Terranova Is Short (HES), (WYNN)