Weekly Thematic

The Stock Market Is Sending Conflicting Signals – Can Everyone Win? 
December 3, 2020
Companies Mentioned:
Westlake, Dow, LyondellBasell, Ford, Sherwin Williams, Linde, Air Products, Air Liquide
Commodities Mentioned:
Subjects Covered:
Travel Spending, Unemployment, Stock Valuations, COVID, Durable Demand

C-MACC Perspectives 35 – Rotation


The Stock Market Is Sending Conflicting Signals – Can Everyone Win?


  • With growing global unemployment and 2021 stimulus likely to focus on job creation and saving those industries most damaged, can the chemical industry have its cake and eat it too? Can the benefits reaped by a surge in consumer spending on material things, continue when the rotation to buying “experiences” kicks in?
  • The stock market is pricing in recovery in industries that are going to take discretionary spending away from materials, and it is likely that there is not enough cash to spend on both. But material stocks are strong as current fundamentals are far better than would have been predicted a few months ago.
  • The COVID fear factor is high and today the focus is on making life less stressful through above trend spending on consumer durables, toys etc. The materials industries are reacting to a surge in this demand and pricing and margins are high as a consequence.  We question how long the momentum can continue

See PDF below for all charts 

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