June 18, 2021
Lots of information is trading that has investors skittish for the upcoming horizon. Whether it's stagflation or a potential tax boon, concerns over the future are elevated. However U.S. Chief Equity Strategist at Credit Suisse, Jonathan Golub debunked the main arguments. Despite high inflation risk, he says firms still have strong pricing power and can make money even with higher input costs. The Fed is most likely far away from a rate hike and inflation is most likely temporarily dismissing the possibility of stagflation. There are also concerns that growth and earnings per share will halt, but it is clear that most projections have them still improving above trend through the end of 2022. The main reasons to stop the bull run have low chances of playing out.
FINSUM + Magnifi: Sustained inflation risk is most likely low, because ultimately the Fed has control, and stagflation is a demon the Fed conquered years ago.
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