Diana Wagner (Capital Groups) | Remember in 2011 when Netflix raised prices by dividing its streaming subscriptions from its DVD service? The announcement sparked an uproar that forced the company to issue an apology and hammered the stock price. Today the world is in a very different place — and so is Netflix: The company is now a dominant streaming service and a megahit-making machine with more than 213 million…
Bankinter : Preliminary December CPI +6.7% YoY rises strongly from 5.5% previously and well above the 5.6% expected. The underlying rate stands at 2.1% YoY in December (preliminary) from 1.7% previously. According to the INE, the advanced figure for December would be the highest CPI rate since March 1992. Of note in this behaviour is the rise in the price of electricity, higher this month than in December 2020. Also…
Fernando González Urbaneja | The thesis defended by the US Treasury and the Fed that the upturn in inflation this year will be temporary is losing momentum by the week. The latest data for October brings the year-on-year rate to 6.2%, a figure that has not been seen for the last thirty years. What is more worrying is that core inflation, excluding energy and unprocessed foods, is above 5%. It…
Simon Keane (Schroders) | “Output gap”, “bottlenecks”, “core inflation”, “base effects”, “second-round effects” “labour participation rate”. These are some of the key industry terms essential to understanding what’s going on with inflation.Soaring job vacancies reflect the strong economic recovery of the world’s major economies, as Covid-19 induced restrictions have been gradually eased. Shortages of materials, energy and transport have also been seen, resulting in backlogs of work across a number of sectors.
Fernando González Urbaneja | The advance CPI data for October burst in early in the morning like an explosive device; no one had estimated, not even in the worst scenario, a year-on-year rate of 5.5%, which is unprecedented in the history of the euro, an anti-inflationary currency. The 5.5% in October suggests that the figures for November and December will not be lower as they contrast with increases of two…
FMCG companies’ quarterly accounts presentations are clearly on the upside, implying that the current bout of higher than usual inflation rates (in recent years) will be with us for longer than expected. For example, Nestlé reported that it is already passing on higher energy, transport and raw material costs to the end customer, resulting in the Swiss company applying an average price increase of 2.1% to its products in Q3’21….
Bert Flossbach (Flossbach von Storch) | Delivery times for goods are rising worldwide due to a lack of intermediate products. The acute shortage of semiconductors, which are used in almost all devices, machines and cars, is causing particularly large problems for many companies. Ford therefore stopped production at its plant in Cologne until the end of October and Opel even stopped production in Eisenach until the end of the year….
José Ramón Díaz (Caixabank Research) | The recent deterioration of the growth/inflation mix is the result of the dynamics of an asymmetric recovery and will remain subject to a high level of uncertainty in the coming quarters. Nevertheless, we are still far from a scenario of stagflation like that of the 1970s, which is the major source of concern for a number of economists. This is because, firstly, the global economy is much more flexible than it was 50 years ago. Also, economic policy, especially in the monetary sphere, now has the tools (and the independence) to respond to such a risk.
Link Securities | According to the final estimate for the figure, released by the National Statistics Institute (INE), the consumer price index (CPI) in Spain rose by 0.8% in September compared with August. This brings the year-on-year growth rate to 4.0% (3.7% in August). The reading was in line with its preliminary one and with analysts’ consensus expectations. Inflation is thus at its highest level since September 2008. In September,…
J.P. Marín-Arrese | The Opposition accuses the Spanish PM of clinging to power regardless of the ways and means for achieving that goal. He indeed broke his electoral promise of never coming to terms with extreme-left Podemos. Before the polls, he told voters he wouldn’t sleep in peace sharing his bed with that party’s leader. After Election Day, he rushed to set up a coalition government with him, making his…