Global Markets Struggle With Inflation
Stock markets around the world have been weaker recently as they struggle with the implications of global inflation. Asian markets in particular are worried; Asian currencies have been weak on inflation concerns. Consider the following headlines:
Russia: PPI up 25 percent Year Over Year (YOY)
South Korea: inflation at 7-yr high
Vietnam: inflation up 25 percent YOY
As a result, emerging market stocks have been fading:
China down 54% (from the high in October 2007)
India down 32% (from the high in January)
Russia down 7% (from the high in May)
Meantime, companies in the U.S. are emphasizing the impact of inflation on their bottom lines. Lowe's is seeing "unprecedented requests for price increases;" Dow Chemical is raising prices for the second time in a month; energy costs up fourfold last 5 years.
All this is putting pressure on U.S. indices; the Dow is sitting near the 52-week closing lows from back in March.
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