But, even as you keep the above in mind, here are three emerging investment themes.
Favor the companies doing more with less, and those with direct housing exposure.
Good examples here are Whirlpool (WHR - Get Report) and carpet maker Mohawk (MHK - Get Report). They're churning out new products and have higher price points, and they're enjoying moderating inflation. They've also streamlined manufacturing and production procedures.
Favor sector standouts that want to keep standing out.Starbucks (SBUX - Get Report) shares responded quite well to the company's latest earnings report. The earnings call was even more impressive, however, in terms of global plans for new store openings and remodeling; the ability to reignite U.S. sales at first signs of consumer-spending weakness; and the pace of fundamental change in Europe. (A shift to licensed stores is a positive.) Also, the ensuing 12 months stand to be deflationary, which will help bring own coffee-bean costs. Favor consumer-product companies that are successfully passing on price increases, as inflation is subdued. I think you could snag Clorox (CLX - Get Report) at a slightly cheaper price, but the stock is going on my watch list. Although volumes were mixed in the quarter, another three months of pricing gains have caught my attention, given the sea of price competitiveness to drive meager volume gains in consumer products. This is encouraging to see as consumers continue to trade down -- companies had clearly needed get more price competitive in the third quarter. It's also a positive given that input inflation is not running rampant.