Is world industrial production starting to pick up? The market suggests something is heating up. We watch closely the performance of an ETF called KOL which is essentially representation of world coal stocks. From the chart below a clear trend of outperformance of KOL vs. the Dow Jones World is depicted. If this trend holds, and we find little reason to believe that it will not hold, then we should see higher commodity prices, higher equity markets, higher bond yields etc. Of course there is an added “kicker” in the valuations of coal stocks. Many coal counters are as cheap as they have been in the last 20 years.
