In fact, one of the reasons for the current round of enterprises to add inventory is a significant improvement in the profit growth of industrial enterprises. As shown in Figure 2, the profit growth rate of industrial enterprises increased from -8.8% of the lowest point in August 2015, and gradually increased to replica watches 23.8% in March 2017. Industrial enterprises to improve the profit growth will naturally improve the company’s future market expectations, so as to drive the company’s inventory behavior. However, as shown in Figure 3, leading to the swiss replica watches current round of industrial enterprises to pick up the main reason for the profit, it seems that the increase is not the number of industrial sales, but the rise in industrial prices. As shown in Figure 3, the increase in PPI year-on-year growth is basically synchronous with the increase in profit growth of industrial enterprises. In other words, the sustainability of firm-plus-stock behavior will depend on the sustainability of PPI growth.
Our previous analysis shows that the reason for the significant increase in PPI growth in the current round is that the global commodity prices in the supply side rebounded significantly in 2016, and the demand for domestic real estate, automobile and other cyclical industries is stimulated. Third, the supply side of the structural reform directly compressed a lot of commodity supply. From the current point of view, 2017 after three quarters, PPI growth rate will gradually replica watches uk decline in the probability of events: First, the global commodity prices in the recent consolidation or even down trend; Second, the real estate, auto industry last year’s hot momentum is difficult to sustain ; Third is the supply side of structural reform in 2017 than in 2016 more moderate, more market-oriented; four is the base effect last year.