Inflation Is Surging, But These Stocks Could Benefit

Inflation Is Surging, But These Stocks Could Benefit

Inflation in the U. S. continues to surge, with the consumer price index published by the Bureau of Labor Statistics last week rising by 6. 8% in November compared to a year ago. This marks the fastest annual increase since 1982 and an increase from the 6. 2% rate seen in October. The increase is driven by higher food and energy prices as well as a significant increase in used car and truck prices. The core CPI, which excludes energy and food, also jumped 4. 9% on a year-on-year basis, marking the highest levels since 1991. Rising inflation could threaten the economic rebound following Covid-19, and has the U. S. Federal Reserve turning increasingly hawkish, potentially advancing its timeline for interest rate hikes to keep price rises under control. While stocks, in general, fare better than bonds during periods of high inflation, our theme of Inflation Stocks includes companies from the banking, insurance, consumer staples, and energy sector that could be more likely to benefit from high inflation and possibly higher interest rates. The theme has returned about 29% year-to-date, marginally outperforming the S&P 500 which has returned about 26% over the same period. Within our theme, Exxon Mobil XOM