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Companies with pricing power can protect their profit margins by passing those costs along to customers.
On a monthly basis, headline inflation rose 0.470% versus the previous month and 0.550% for the core rate. Certainly some very hot prints when viewed from afar. But a closer look at the numbers tells a slightly different story.
If you’re worried that higher inflation is here to stay, keep three things in mind.
While company earnings have generally been solid, price-to-earnings ratios for developed and emerging markets were all above their 15-year averages as of 30 November 2021.
Amid so many inflation catalysts -oil prices, supply and production constraints, rising rents and wages- the Fed considers the Omicron variant is more likely to increase inflation than cause growth to slow down.
Valentin Bissat, senior economist and strategist at Mirabaud Asset Management, has analysed the twelve most significant market shocks for the dramatic year (2021) using explanatory charts.
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