Raw Materials Should Get an Economic Lift
Earlier this week, I discussed the need to watch key pricing trends for key raw materials, given their impact on companies' operating margins and their earnings prospects. While I dished on the potential impact of higher corn prices and the potential pain that it may inflict on Ingredion (INGR) and other companies that count corn as key input, the rebounding manufacturing demand around the globe spells opportunity for several materials companies.
Yesterday, I rattled off a number of data points published by HSBC and Markit Economics that pointed to an improving manufacturing economy in China, Brazil, Indonesia and other territories. Soon after, Markit published its U.S. manufacturing Purchasing Managers' Index data for December, which rose to a reading of 54, marking the strongest rate of growth since May. Those data confirm that the rebound in the domestic economy is on a good footing. And as I mentioned yesterday, favorable forecasts in 2013 for both housing starts by the National Association of Home Builders and automotive sales according to market forecasting firm Polk paint a favorable picture for the months ahead....260 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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