Will Tech Win?
We are now almost 75% done with the second-quarter earnings season. The results so far have been mixed; very encouraging in median EPS growth terms, but downright awful in terms of total net income growth. Given the mix of which firms have reported so far and those yet to come, we should see some improvement on both fronts from here on out.
So far, 364 firms, or 72.8% of the S&P 500, have reported. The results are somewhat encouraging. Positive surprises are leading disappointments by a 2.5:1 ratio, which is only slightly below recent historical norms. The median surprise is also inline with recent history at 3.33%.
The median year-over-year EPS growth rate of 10.60% is wonderful news for the market. And it looks like it will probably hold up, given the expectations for those that have yet to report. The median expected EPS growth rate for the firms that are yet to report is 7.0%. Given the propensity for positive surprises to outnumber disappointments, on a median EPS basis, the second-quarter earnings season could be far better than the mood of the market would seem to indicate.
Based on the actual returns, Tech is winning the growth derby, with median EPS growth of 25.0%. This is based on the results of 52 companies, or 73.2% of the total Tech firms in the index.
Energy is in the Silver medal spot, and should have a good kick at the end of the race, with the remaining firms expected to post 46.4% growth. This should propel it into the gold medal spot when the race is done, but with almost three quarters of the results in, time is getting short and Tech just might pull out an upset here.
On the surprise front, two sectors have been particularly impressive. Health Care’s median EPS growth rate is 17.4%. Health Care is showing 7.5 positive surprises for each disappointment, with a median surprise of 4.56%. This is not based on just a handful of results either, as over three quarters of Health Care reports are already in.
The Industrials have been just as impressive, with growth of 15.6%, a 7.8 surprise ratio and a 5.13% median surprise. It looks like those two will be battling for the bronze medal in terms of median EPS growth. Health Care is currently ahead, but the expectations of the remaining firms suggest that the industrials should have a better kick at the end.
The Financials have been the weakest sector by far, with the median EPS dropping by 18.2% from a year ago. The sector is responsible for over one third of all the earnings disappointments to this point. It is the only sector where disappointments have exceeded positive surprises in number. Consumer Discretionary is the only other sector to show negative year over year growth on a median EPS basis (-1.8%).
The expected results for the remaining Financials are not as bad as the ones that have already reported, but are still fairly soft at -1.4%. Materials should provide the worst remaining results at -80.0% expected, but there are just a handful of remaining Materials firms. The remaining Consumer Discretionary firms are expected to show a 1.8% decline, meaning that there should not be a big change from what has already been reported.
Some of the factors that should help median EPS growth are share repurchases, which, though having slowed in recent months, will still reflect what happened last year. Oddly, increased share counts will also help boost EPS among the Financials. Since the ones that have increased their share counts the most (by going hat in hand to the sovereign wealth funds looking for new capital) are also the ones that are likely to reports losses, so the loss per share will be less.
In addition, to the extent that firms have large operations overseas, they should benefit from the currency translation effects of the weak dollar. The weak dollar has also boosted those companies that export a substantial portion of their sales.
Keep in mind that median growth rates are inherently equally weighted, so the growth rate for Cabot Oil and Gas (COG - Analyst Report) is just as significant to the results for the Energy sector as the growth rate for Exxon XOM - Analyst Report).
| Sector | Q2 08 Median Growth Rep. | Q3 08 Median Proj. Growth. | 2007 Median Rep. Growth | 2008 Median Proj. Growth | % Reported | Median % Surprise | # Pos Surprise | # Neg Surprise | # Match |
| Tech | 25.71% | 11.44% | 13.76% | 17.15% | 73.24% | 4.57% | 33 | 13 | 6 |
| Energy | 21.43% | 37.68% | 11.15% | 28.91% | 74.36% | 1.47% | 17 | 10 | 2 |
| Telecom | 20.00% | 7.94% | 25.40% | 10.66% | 55.56% | 3.08% | 3 | 1 | 1 |
| Healthcare | 17.36% | 11.53% | 17.92% | 14.64% | 76.92% | 4.56% | 30 | 4 | 6 |
| Industrial | 15.63% | 10.43% | 14.29% | 13.92% | 83.64% | 5.13% | 39 | 5 | 2 |
| Cons. Stap. | 11.43% | 6.42% | 10.87% | 10.48% | 65.85% | 2.63% | 18 | 3 | 6 |
| Utilities | 9.54% | 3.53% | 7.79% | 6.45% | 45.16% | 7.57% | 8 | 5 | 1 |
| Materials | 7.24% | 6.04% | 14.31% | 7.47% | 89.66% | 4.33% | 18 | 6 | 2 |
| Cons. Disc. | -1.87% | 1.43% | 11.21% | 1.47% | 63.10% | 3.41% | 34 | 13 | 6 |
| Financial | -18.21% | -13.89% | 3.70% | -6.38% | 80.90% | 0.00% | 33 | 34 | 5 |
| S&P 500 | 10.61% | 6.96% | 12.25% | 10.30% | 72.80% | 3.33% | 233 | 94 | 37 |
| Sector | Q2 08 Proj. Growth | Q3 08 Proj. Growth | 2007 Rep. Growth | 2008 Proj. Growth |
|||
| Energy | 46.39% | 72.12% | 47.48% | 35.90% | |||
| Tech | 22.22% | 2.04% | 21.05% | 14.92% | |||
| Industrial | 17.42% | 12.82% | 17.76% | 13.04% | |||
| Cons. Stap. | 11.34% | 11.52% | 12.95% | 10.06% | |||
| Healthcare | 5.62% | 5.05% | 12.89% | -0.35% | |||
| Utilities | 2.27% | 7.41% | 11.30% | 6.00% | |||
| Financial | -1.35% | 0.00% | -0.18% | 0.04% | |||
| Cons. Disc. | -1.79% | 8.59% | 6.17% | 6.46% | |||
| Telecom | -29.17% | -17.65% | -9.06% | -14.96% | |||
| Materials | -80.00% | -17.45% | -1.25% | -32.17% | |||
| S&P 500 | 6.98% | 7.41% | 11.85% | 8.55% | |||
Total Net Income Growth
While things might look ok on a median EPS growth basis, the same is not true on a total net income basis. This is shaping up to be yet another very ugly quarter.
The blame for net income decline once again goes to the Financials (with best supporting actor nomination for the Consumer Discretionary). Note that the results shown are through the close on 7/31/08, and do not include the massive loss that GM reported 8/1/08. Overall, the second quarter is now expected to be even weaker than the first quarter.
Overall, total net income for the S&P 500 is expected to be 17.5% below the second quarter of 2007. The results so far show a decline of 16.4%. The only significant good news expected to come in is in the Energy sector. In the Financial sector, total net income is expected to be 76.0% lower - roughly in line with the 77.8% drop posted so far. Last year, at this point in the reporting season, the Finance sector had gathered 28.4% of all earnings in the S&P 500, this year it is only responsible for 7.5% of total earnings.
Things are also falling apart for the Discretionary firms, despite the stimulus checks. Total net income for the sector is expected to be down 36.7% from a year ago, an even worse showing than the 18.8% year-over-year decline posted in the first quarter. However, when GM’s worse-than-expected loss is included, expect the number to deteriorate further.
Total net income for all the S&P 500 firms that have reported so far is $145 billion versus $173.4 billion a year ago. That is, however, a slight improvement on a sequential basis from the $139.2 billion these same 364 firms posted in the first quarter. Total net income for the remaining firms is expected to fall for seven of the ten sectors.
Surprisingly Tech is leading in total net income growth reported so far, up 22.4%, and Utilities are closely following at a gain of 22.3%. However, relatively few of the Utilities have reported and the expectations for the remaining firms (-6.2%) are far less favorable. Energy is in the bronze medal spot with growth of 15.2%. While there should be some improvement from the remaining firms, it might not be enough to take the Gold from Tech. That would rank as a major upset.
While all sectors other than Finance and Discretionary have gathered a larger share of profits this year, the biggest gains have been by Energy (5.94 points) and Tech (4.40 points). Energy has by far the biggest share at 21.6%, followed by Health Care at 15.8%.
| Sector | Q4 07 Rep. Growth | Q1 08 Rep. Growth | Q2 08 Rep. Growth | Q3 08 Proj. Growth | 2007 Rep. Growth | 2008 Proj. Growth | 2009 Proj. Growth |
|
| Technology | 29.36% | 11.80% | 22.43% | 6.71% | 19.22% | 17.70% | 17.93% | |
| Utilities | 23.98% | 9.07% | 22.29% | 2.39% | 11.62% | 9.76% | 10.61% | |
| Energy | 18.71% | 19.58% | 15.20% | 50.79% | 4.82% | 38.62% | 13.90% | |
| Health Care | 18.94% | 3.75% | 9.10% | 2.51% | 19.15% | 9.52% | 9.89% | |
| Telecom | 42.19% | 9.70% | 8.13% | 3.62% | 24.27% | 10.12% | 9.35% | |
| Industrial | 5.13% | 4.24% | 5.49% | 2.05% | 9.49% | 8.02% | 11.15% | |
| Materials | -0.63% | 17.88% | 5.42% | 6.74% | 9.29% | 14.63% | 14.01% | |
| Cons. Stap. | 3.91% | 13.62% | -3.63% | 6.39% | 4.89% | 11.77% | 11.28% | |
| Cons. Disc. | 16.59% | -12.01% | -23.33% | -12.01% | -1.19% | 6.45% | 30.32% | |
| Financials | -107.98% | -68.43% | -77.80% | -36.91% | -19.72% | -46.55% | 80.86% | |
| S&P | -20.16% | -14.20% | -16.42% | 0.75% | 1.82% | 1.78% | 22.15% | |
| Sector | Q2 08 Rep. Growth | Q2 07 Rep. Growth | Q1 08 Rep. Growth | Q1 07 Rep. Growth | Q2 08% Rep. Growth | Q2 07% Rep. Growth |
||
| Energy | $31,351 | $27,214 | $26,478 | $22,143 | 21.63% | 15.69% | ||
| Health Care | $22,896 | $20,987 | $23,346 | $22,503 | 15.79% | 12.10% | ||
| Industrial | $21,791 | $20,656 | $18,738 | $17,976 | 15.03% | 11.91% | ||
| Technology | $20,078 | $16,399 | $18,795 | $16,812 | 13.85% | 9.45% | ||
| Cons. Stap. | $12,270 | $12,732 | $11,867 | $10,445 | 8.46% | 7.34% | ||
| Financials | $10,931 | $49,246 | $15,460 | $48,977 | 7.54% | 28.39% | ||
| Materials | $8,119 | $7,702 | $7,791 | $6,609 | 5.60% | 4.44% | ||
| Cons. Disc. | $7,084 | $9,239 | $6,758 | $7,681 | 4.89% | 5.33% | ||
| Telecom | $6,795 | $6,284 | $6,562 | $5,982 | 4.69% | 3.62% | ||
| Utilities | $3,661 | $2,994 | $3,423 | $3,139 | 2.53% | 1.73% | ||
| S&P | $144,975 | $173,452 | $139,218 | $162,266 | 100.00% | 100.00% | ||
| Sector | Q4 07 Rep. Growth | Q1 08 Rep. Growth | Q2 08 Proj. Growth | Q3 08 Proj. Growth | 2007 Rep. Growth | 2008 Proj. Growth | 2009 Proj. Growth |
|
| Energy | 40.42% | 47.33% | 22.47% | 79.00% | 9.61% | 53.93% | 8.33% | |
| Industrial | 19.09% | 20.38% | 7.35% | 10.43% | 18.05% | 18.14% | 15.02% | |
| Cons. Stap. | 10.13% | 8.73% | 6.60% | 8.13% | 23.64% | 10.88% | 7.39% | |
| Health Care | 3.01% | -2.07% | -3.62% | 0.61% | 14.27% | 3.94% | 16.01% | |
| Technology | 26.25% | 12.48% | -3.90% | -4.18% | 27.57% | 7.64% | 14.32% | |
| Utilities | 4.01% | 8.73% | -6.22% | 2.75% | 9.12% | 4.34% | 11.77% | |
| Cons. Disc. | -11.13% | -23.78% | -50.13% | -11.58% | -9.39% | -17.54% | 31.27% | |
| Materials | -26.41% | -97.93% | -56.53% | -35.96% | -13.40% | -57.25% | 93.10% | |
| Telecom | -9.68% | -52.40% | -59.48% | -62.96% | -10.80% | -57.00% | 2.60% | |
| Financials | -193.56% | -135.39% | -68.22% | 34.93% | -25.83% | -54.13% | 135.17% | |
| S&P | -24.63% | -20.08% | -21.13% | 14.12% | 2.76% | 0.58% | 22.07% | |
| Sector | Q4 07 Rep. Growth | Q1 08 Rep. Growth | Q2 08 Proj. Growth | Q3 08 Proj. Growth | 2007 Rep. Growth | 2008 Proj. Growth | 2009 Proj. Growth |
|
| Energy | 23.12% | 25.75% | 16.95% | 57.12% | 5.91% | 42.22% | 12.48% | |
| Technology | 28.60% | 11.99% | 14.55% | 3.89% | 21.28% | 15.10% | 17.05% | |
| Utilities | 13.21% | 8.90% | 8.16% | 2.56% | 10.36% | 7.06% | 11.17% | |
| Health Care | 17.26% | 3.21% | 7.78% | 2.33% | 18.64% | 8.96% | 10.48% | |
| Industrial | 6.14% | 5.58% | 5.68% | 2.85% | 10.20% | 8.91% | 11.52% | |
| Materials | -2.24% | 14.68% | 2.88% | 4.64% | 8.08% | 11.58% | 15.29% | |
| Cons. Stap. | 6.48% | 11.45% | 0.06% | 7.06% | 11.83% | 11.41% | 9.69% | |
| Telecom | 31.57% | 1.41% | -2.08% | -6.47% | 17.75% | 0.67% | 8.95% | |
| Cons. Disc. | 2.01% | -18.76% | -36.73% | -11.84% | -5.32% | -5.11% | 30.72% | |
| Financials | -120.02% | -78.45% | -76.04% | -30.05% | -20.75% | -47.74% | 88.35% | |
| S&P | -21.12% | -15.55% | -17.51% | 3.50% | 2.02% | 1.51% | 22.13% | |
The Zacks Revisions Ratio
To help gauge the direction of the market, we take note of what analysts are thinking. By tallying their EPS changes, we can determine our “revisions ratio.” This ratio simply divides the total number of positive estimate revisions by the total number of estimate cuts. Thus, a high ratio is a bullish indicator and a low ratio is bearish. For the S&P 500 as a whole, a number below 0.80 or above 1.25 is generally significant. For individual sectors the distance from 1.0 should be greater for the numbers to be significant.
With positive surprises outnumbering disappointments by five to two, it is not a shock that the revisions ratio has started to climb from the depths. After all second-quarter earnings are part of full year 2008 earnings, so if a company posts a positive surprise and the analysts don’t raise full year earnings, they are implicitly cutting estimates for the third or fourth quarters. It is now at 0.98, a reading that is neutral, up from 0.81 last week, and 0.61 two weeks ago. The overall pace of estimate revisions continues its rise, and is approaching its seasonal peak. Over the last four weeks there have been 3,017 changes in estimates: 1,521 up and 1,556 down, up 30.3% from 2,315: 1,037 up and 1,278 down last week. The ratio of firms with rising mean estimates to falling mean estimates is 0.87, slightly weaker than the revisions ratio, but also in neutral territory.
On the back of their strong surprise ratios, Health Care and industrials have moved into the top slots for the 2008 revisions ratio, with readings of 2.68 and 2.15. Surprises have not been as strong for Energy (1.7:1 ratio, 1.42% median surprise), but it still has a respectable reading of 1.55. Financials and Discretionary are the weak sisters with readings of 0.34 and 0.69, respectively.
Notable Health Care stocks on the upside include Abbott Labs (ABT - Analyst Report), Johnson & Johnson (JNJ - Analyst Report) and St. Jude (STJ - Analyst Report). The Aerospace and Defense names were particularly strong among the Industrials, including General Dynamics (GD - Analyst Report), Lockheed Martin (LMT - Analyst Report), and Raytheon (RTN - Analyst Report). Strong Energy firms worth noting include Anandarko (APC - Analyst Report), EOG Resources (EOG - Analyst Report) and National Oilwell Varco (NOV - Analyst Report).
In the Consumer Discretionary sector, the analysts checked out of the hotel companies MarriotT (MAR - Analyst Report) and Starwood (HOT - Analyst Report). The Financials included in the Dow 30 seemed under particular pressure, including American International Group (AIG - Snapshot Report), American Express (AXP - Analyst Report), Citigroup (C - Analyst Report), and J.P. Morgan (JPM - Analyst Report).
| Avg. 4wk EPSChange (FY08) | Avg. 4wk EPS Change (FY08) | Revisions Ratio | Firms With FY08 EPS Increase | Firms With FY08 EPS Decrease |
| Health Care | 2.90% | 2.68 | 33 | 14 |
| Industrials | 1.01% | 2.15 | 35 | 19 |
| Energy | 0.19% | 1.55 | 30 | 9 |
| Utilities | -0.43% | 1.46 | 11 | 11 |
| Consumer Staple | -0.46% | 1.32 | 18 | 18 |
| Telecom | -0.72% | 1.26 | 6 | 3 |
| Materials | -0.80% | 0.98 | 11 | 18 |
| Technology | -0.41% | 0.84 | 29 | 36 |
| Consumer Disc | -3.48% | 0.69 | 25 | 55 |
| Financial Services | -5.66% | 0.34 | 19 | 67 |
| S&P 500 | -6.43% | 0.98 | 217 | 250 |
Unlike 2008, there is no mechanical reason for analysts to raise their numbers for 2009 in response to an earnings surprise. While it did rise, it remains in negative territory. It rose to, 0.76, from 0.66 last week, and 0.56 two weeks ago. In other words, despite all the positive earnings surprises, over the last four weeks analysts have cut four estimates for every three they have raised.
The Energy sector, with a revisions ratio of 3.51, remains the strongest. Utilities and Health Care also put in decent showings at 2.67 and 1.72, respectively. However, the Utilities reading is based on a very small number of total estimate revisions. Energy firms showing noteworthy strength include the Oil Service majors, Baker Hughes (BHI), Halliburton (HAL), National Oilwell Varco (NOV) and Schlumberger (SLB).
The revisions picture for the Financial sector is even worse for 2009 than it is for 2008, coming in at 0.19, or over five cuts for every increase. Revisions like these will eat away at the robust earnings rebound seen for 2009 (unless 2008 gets cut faster). If the Financials were excluded, the revisions index would pop to 1.06. We do not seem to be getting out of the woods on the Financial sector front. While there is weakness throughout the sector, major regional banks seem to be the worst hit. In particular, weakness at BB&T (BBT), Comerica (CMA), SunTrust (STI), Regions Financial (RF) and Zion (ZION) was noteworthy.
The total number of revisions for the whole S&P 500 for 2009 is also well past its seasonal low point. There were a total of 2,752 revisions: 1,189 up and 1,563 down. This is up 33.1% from 2,067 (819 up and 1,248 down) last week.. The ratio of firms with rising mean estimates to falling mean estimates is 0.72, in line with the revisions ratio.
| Avg. 4wk EPSChange (FY09) | Avg. 4wk EPS Change (FY09) | Revisions Ratio | Firms With FY09 EPS Increase | Firms With FY09 EPS Decrease |
| Energy | 4.22% | 2.86 | 34 | 5 |
| Utilities | 0.48% | 2.67 | 16 | 8 |
| Health Care | 0.15% | 1.72 | 31 | 18 |
| Industrials | 0.16% | 1.19 | 23 | 27 |
| Consumer Staples | -0.28% | 1.11 | 17 | 18 |
| Materials | -1.38% | 0.88 | 10 | 18 |
| Telecom | -0.55% | 0.76 | 5 | 4 |
| Technology | -4.36% | 0.65 | 26 | 36 |
| Consumer Discr | -4.35% | 0.49 | 19 | 59 |
| Financial Services | -7.26% | 0.19 | 11 | 73 |
| S&P 500 | -5.40% | 0.76 | 192 | 266 |
Market Cap versus Total Earnings
When making investment decisions, growth should always be looked at in conjunction with how much you are paying for a stock. Thus, it makes sense to look at the total earnings expected for a sector, relative to that sector’s total market capitalization. This is basically a variation on looking at the P/E.
The chart below shows the share of total earnings for 2007, 2008 and 2009, as well as the share of total market capitalization for each sector (the final bar shown). Since the S&P 500 is a market cap weighted index, this is the same as its index weight. On the chart below, the difference between the sizes of the first three bars shows if a sector is gaining or losing “earnings share”. The difference between the final bar and the first three bars shows if the sector is selling for an above or below market P/E. If the final bar is smaller than the other bars, the sector is selling for a below market P/E. However, as opposed to just showing the sector P/Es, it also shows the relative importance of the sectors to the overall index.
For years, the Financials were the dominate force in the market, both in terms of market cap, and even more so in terms of total earnings. They have now been decisively dethroned on both counts. On the Market cap front it just recaptured second place from Energy. However, it has now slipped into fourth place behind Tech and Health Care based on 2008 earnings. Still, despite their current problems, the Financials are still a very significant influence on the market.
Even with all the disasters in the sector, for 2007, the Financials accounted for 21.8% of the total net income for the S&P 500. In 2008, that is currently expected to decline to 11.1% before rebounding to 17.3% in 2009. However, in recent years the sector has accounted for well over a quarter of all earnings.
Energy has usurped the crown this year, with its earnings share climbing to 21.8% from 15.6% in 2007. Energy should keep the earnings crown for 2009 as well, gathering 20.1% of all the earnings of the S&P 500.
On the market cap (and index weight) front, Tech overtook the Financials a two months ago and currently stands at 17.1%. The Financials have plunged to 14.9% of the index. As recently as the end of February, Financials had a 17.2% index weighting versus 15.7% for Tech and just 13.0% for Energy. Most analysts are using very conservative pricing assumptions in their forecasts for the Energy sector (relative to that implied in the futures market), so earnings estimates still have lots of room to rise.
Keep in mind that these numbers are snapshots, when you should be thinking about a movie. At the end of February (the first time we had a complete read on 2009), the Financials were expected to gather 22.1% of all earnings for 2008, and Energy was expected to only get 16.0%. For 2009, the expected earnings shares were 15.0% for Energy and 22.4% for Financials. A year ago before the credit crunch hit, Financials were expected to gather 26.3% of 2008 earnings and held a 19.4% weighting in the index. Energy represented just 10.9% of the total market capitalization and was expected to get 12.9% of the total earnings in 2008. In general it seems as if the Energy sector is consistently gaining 0.3% of share for each year every week, with a similar decline for the Financials. If those trends continue, then Energy could be as dominate on the earnings front in 2008 and 2009 as the Financials were in 2007 or 2006.
For many years Financials were clearly the dominate factor in the overall market, despite generally selling for below market P/Es. Due to an implosion in earnings that has been far worse than the dismal market performance of the sector, the Financials now have the highest P/E’s based on 2008 earnings, displacing the perennial high P/E sector Technology. Based on 2008 earnings, the Financials have a P/E of 19.1x. However, given the expectation that the bleeding will stop next year, the P/E based on 2009 earnings is just 10.2x. However, given the pace of estimate cuts in the sector, the true P/E is probably higher since the actual earnings will be significantly lower.
Energy has just taken the throne as the cheapest based on 2008 earnings trading at 9.0x, and 8.0x based on 2009 expectations. There is no question in my mind that Energy is the cheapest sector of the market, and every portfolio should be overweight in it. The Tech sector is still a bit on the expensive side, trading for 17.2x 2008 and 14.7x 2009 expectations. Health Care looks interesting trading at 14.1x 2008 and 12.8x 2009 earnings.
Keep your eyes on the revisions, they give you the best clue as to if the earnings will be achieved and if the P/E’s are for real. While the recent declines in oil prices may cause the upwards revisions to moderate for the Energy sector, most analysts are using very conservative price assumptions.
The S&P 500 as a whole is trading for 14.4x and 11.8x, 2008 and 2009 earnings, respectively. Based on a blend of 50% 2008 earnings and 50% 2009 earnings; that translates to a 7.63% earnings yield, which looks extremely cheap relative to a 3.95% ten year T-note. Even against the A rated corporate bond yield of 6.13% it looks attractive. However, the current level of expectations for corporate earnings still implies that profits will stay well above their historical averages as a share of GDP. That would be an exceedingly rare occurrence during a recession. The comparison between the earnings yield on the S&P and the 10 year T-note is in my opinion more a reflection of the extreme unattractiveness of long term T-notes at this point than stocks looking particularly cheap in general, however there are attractive stocks out there. It appears that the flight to quality has caused a massive bubble in the price of T-notes. This is far and away, in my opinion, the most significant bubble in the market today, not the price of oil. The prices are hard to justify given the risk that the massive injections of liquidity by the Fed to ameliorate the credit crunch will end up fueling the fires of inflation.
Neil Malkin contributed significantly to this report.
Data in this report, unless stated otherwise, is through the close on Thursday 7/31/2008.