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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Tomas who wrote (72646)9/8/2000 1:08:34 AM
From: ItsAllCyclical  Read Replies (2) of 95453
 
Either the oil bulls are wrong or the market is wrong...but I don't see how we can both be right.

>> Yesterday DuPont, the US chemicals group, was forced to revise downwards its outlook for earnings per share growth in 2000. It estimated the negative impact of higher raw material costs and a weak euro against the US dollar to be Dollars 1bn before tax.

Procter & Gamble, the consumer products company, has announced it will increase prices by 5 to 8 per cent at its laundry products division to take account of the jump in raw material costs. <<

Inflation is starting to show up due to sustained high oil prices yet the market is continuing to advance. I guess most of them have a vested interest in ignoring this data and telling everyone to buy. Almost every single analyst I see is saying that the broad market is poised for a good run this fall. Seems the only time energy is really discussed is whether or not to buy energy stocks. Yes maybe the US economy is less dependent upon energy, but not the world. And we've seen how interconnected the economies are. At some point though someone is going to run for the exits and there will be a mass stampede.

Given the lag time between high oil prices and inflation I think we are only just beginning to see the effects of the last 12 months.

It's almost scary watching it unfold.

As always I'm not saying another 1973 will come to pass. Many will work hard to avoid such a situation (OPEC included), but we're getting to the point where it might be unavoidable and the market doesn't seem to respect this possibility in the least.
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