All,
Obvious throwaway here. I'm a Finance Director that works closely with the commercial organization at a Fortune 500. You could broadly call the industry that I work in basic materials. We're in the middle of our value chain more or less; some products we sell directly to consumers but most are sold to others in our industry. If our earnings are poor, they are often used to proxy the overall economy.
In the last ~2 months the tone from the businesses has changed really significantly. Customers are slowing down their 2019 plans pretty seriously and no one is saying that next year looks great for their core business. European customers have slashed their production more significantly than others, but best believe that China is sucking wind as well.
The key driver here is raw materials. You can see this in all of the earning reports that are trickling out; PPG for example. The fact of the matter is that trade wars are going to leave people paying more for cans of paint and that's going to slow things up.
I say all this to say, this is feeling a lot like a macro slowdown. Customers cutting forecasts, backing off commitments, rising raw materials with no power to pass on pricing to customers. I certainly don't think it's time to panic because this doesn't feel like an explosion but rather the front of a slowdown.
Submitted October 14, 2018 at 10:03AM by f500finance https://ift.tt/2yyCX6A
