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CF Industries is a leading producer and distributor of nitrogen, which is primarily used in fertilizers. The company operates nitrogen manufacturing plants primarily in North America. CF also produces nitrogen in the United Kingdom and holds a joint venture interest in a nitrogen production facility in Trinidad and Tobago. CF makes nitrogen primarily using low-cost US natural gas as its feedstock, making the company one of the lowest-cost nitrogen producers globally. It is also investing in carbon-free blue and green ammonia, which can be used as an alternative fuel to hydrogen or as a means to transport hydrogen.

Created in 2018 as a result of the merger between PotashCorp and Agrium, Nutrien is the world’s largest fertilizer producer by capacity. Nutrien produces the three main crop nutrients—nitrogen, potash, and phosphate—although its main focus is potash, where it is the global leader in installed capacity with a roughly 20% market share. The company is also the largest agricultural retailer in North America and Australia, selling fertilizers, crop chemicals, seeds, and services directly to farm customers through its brick-and-mortar stores and online platforms.

CRH is a global manufacturer of a range of building products used in construction projects, operating via a vertically integrated business model. The past decade has seen CRH transform into a leading building materials business, with increasing exposure to upstream building activities such as aggregates and cement. CRH’s geographic footprint is mostly across developed markets. North America is CRH’s largest market and accounts for 75% of EBITDA. The company is the largest producer of aggregates and asphalt in the US.

The Fed's favorite inflation indicator, the PCE Price Index, will be released by the BEA on Friday. The index differs from the better-known Consumer Price Index (CPI) because its composition is changed more frequently and it is quicker to reflect the impact of real-time pricing fluctuations. The BEA is still catching up from the government shutdown, so the report will be based on December data. In the most-recent report, PCE inflation increased at a 2.8% rate year over year through November. By comparison, the latest CPI report, through January, had overall inflation rising 2.4%. Core PCE, which removes volatile food and energy prices, also rose at an annual rate of 2.6% in the latest publication. Our PCE forecasts call for mostly stable readings for in the PCE reports for December: 2.8% for both the headline number and the core reading. We think lingering inflation in certain sticky-priced services will combine with tariff impacts to present a challenge for the Fed as it strives for its 2% goal. Overall, inflation in this cycle peaked in summer 2022 and has been on a fairly consistent downward trek. We track 20 inflation measures on a monthly basis. On average, they are indicating that prices are rising at a 2.64% rate year over year, down slightly compared to the month-ago level. The numbers are volatile and can be distorted by swings within the Producer Price Inflation report. Focusing on core inflation, our reading is 2.50%, flat month over month. Given inflation trends, as well as a recent slowdown in employment, we expect the Fed to implement two more rate cuts over the next several quarters, with the ultimate goal of aligning the fed funds rate to approximately 100-150 basis points above the long-term inflation rate in 2027.