Rotate or Retreat: How to Play Germany's Wholesale Price Divide

The German wholesale price data for early 2025 is screaming at investors to rotate their portfolios—or risk getting left behind. Let’s decode the numbers: while inflation is cooling in energy and tech, it’s roaring in metals and food. This isn’t just a trend—it’s a sectoral war between supply-constrained haves and oversupplied have-nots. Time to act fast before this divergence becomes a chasm.

The Metals Gold Rush: Buy the Supply Crunch

Non-ferrous metals—think copper, aluminum, and zinc—are the new kings of inflation. Prices jumped +27.3% YoY in March 2025, fueled by supply bottlenecks and soaring industrial demand. China’s reindustrialization, green energy infrastructure, and EV battery production are all hoovering up these metals.

This isn’t a blip. The quarterly trend shows prices rising steadily from January (+24.4% YoY) to March, signaling sustained demand. If you’re not already invested in mining stocks or metals ETFs, you’re missing out.

Coffee’s Buzz: Agriculture Isn’t Just for Farmers Anymore

Coffee prices have gone ballistic, spiking +43.5% YoY in March. Sugar and bakery goods aren’t far behind, with +16.3% gains. Why? Supply chain chaos, climate shocks, and a global shift toward premiumization (yes, even in instant coffee) are keeping prices elevated.

This isn’t just about your morning latte—it’s about owning the producers. Companies like Nestlé (NESN) or ETFs tracking commodities like the Teucrium Coffee Fund (COFF) are positioned to profit as inflation stays sticky in food.

Tech and Energy: The New “Dog” Stocks

While metals and agriculture are roaring, tech hardware and energy are in a slump. Computers and peripherals saw prices drop -5.6% YoY in March, reflecting oversupply and weak demand. Meanwhile, mineral oil prices fell -3% YoY, suggesting a market glut.

This isn’t a temporary dip—it’s a structural shift. Investors should sell semiconductor stocks and energy ETFs like the Energy Select Sector SPDR (XLE) now, before they sink further.

The Bottom Line: Rotate or Perish

The message is clear: rotate out of tech and energy, and rotate into metals and agriculture. The German data isn’t an outlier—it’s a global preview. The Fed may be pausing rate hikes, but inflation isn’t dead—it’s just evolving.

Don’t let your portfolio get stuck in the “old economy” of semiconductors and oil. Act now to overweight ETFs like iShares MSCI Global Materials (GMAT) or iShares Agriculture (AGRI). The metals and food sectors are where the real money is being made right now.

The market’s moving. Are you?

Invest wisely, but invest decisively.