By Thomas Mulier Consumers around the world are about to get socked with even higher prices on everyday items, companies from food giant Unilever Plc to lubricant maker WD-40 Co. warned this week as they grapple with supply difficulties.
History may not repeat, but it definitely rhymes! Looking at the macro numbers and market data, today s forward PE of global equities at 20x is very close to that of 2003-04 levels of 17x. The rally of 2003 was led by smallcaps, cyclicals, commodities, accompanied by a macro environment of rising inflation and cheap credit. Sounds familiar? Read more about this trend mirroring; Raamdeo Agrawal’s take on cyclicals; Nilesh Shah’s unlock theme and much more in this weekend’s edition of ‘Long & Short of Markets’.
Déjà vu of ‘04? Only Fed is not rhyming!
Today’s markets and macro-economic data have a lot of similarities to the rally of 2003-04, finds Morgan Stanley strategist Andrew Sheets. However, the rally saw a pause in 2004. The only difference here is that the Fed was hawkish in ‘04, rising interest rates and today the central bank is at least 2 years away from this policy stance. Early 2004 did mark a midway point between the end of easing rates and the start o