Earnings Point The Finger At Inflation

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The global economy will never find balance until it has a chance to go through a large-scale price discovery that resets supply chains. Money can’t buy happiness...or apparently any durable good at the moment. Americans stuffed their coffers during the pandemic, buoyed by stimulus and heavy savings. Now, they can’t unleash that spending because shelves are bare. It may also explain the labor crunch, where record market prices coupled with savings allowed older folks on the bubble to choose retirement. We know we have a supply problem, not a demand one. And the Fed’s low-rate policies are doing little to produce actual economic value. As we discuss in our main story, we expect they will be forced to raise rates even as corporate earnings stall. Only then can we begin to deal with our global mess. Sponsored [Free Report: 5 Top Tech IPOs to Watch for in Q4]( Investors could bank massive profits from these hyper-growth firms. [Get the Report FREE Now]( Inflation Earnings Point The Finger At Inflation Key Takeaways - Consumer goods company Procter & Gamble said they passed along price increases to customers, but not enough to offset inflation. - Steel Dynamics reported strong demand and multi-year high steel prices. - United Airlines is worried that higher jet fuel prices will mean higher airline ticket prices. - Companies that pass along inflation risk losing demand. - Markets could fall if the Fed is forced to raise rates when corporate earnings refuse to grow. [YARN | It s everywhere! | The Simpsons (1989) - S16E19 Comedy | Video gifs by quotes | 6da6a661 | 紗] Consumers know goods and services cost more. Now, companies are saying it’s hitting profits. Inflation Spreads Procter & Gamble (PG) reported earnings this week highlighting robust sales even after increasing prices. But those weren’t enough to offset the severe increases in labor, transportation, and product costs. The company’s CFO warned the company would look to increase prices in certain products within beauty, oral care, and grooming categories to deal with inflation. And they aren’t alone. Apple is preparing to lower forecasts for its iPhone 13 sales in 2022 because it can’t make enough. Steel Dynamics (STLD) reported exploding profits as customer inventory remains low driving higher prices. Grain and soft commodities have seen a surge in price on the back of high demand and fertilizer costs. United Airlines (UAL) CEO firmly stated, “Ultimately higher jet fuel prices lead to higher ticket prices.” Bad News For Stocks Analysts expected earnings to grow on robust demand and pricing power. That may no longer be the case. Companies are now raising prices just to keep earnings constant. And that may crimp demand which could lead to lower earnings. On top of all that, the Fed continues to monitor prices closely. Many central bank members acknowledged the inflation contagion is spreading. Ultimately, that could force them to not just cut back on bond purchases, but raise rates. If that happens without growth in corporate earnings, equity markets could be in for a serious tumble. The Bottom Line: We want to know if every industry is seeing inflation. Watch to see if any companies like Tesla (TSLA) come up with creative ways to manage supply chain challenges. If some of the top innovators out there can’t circumvent inflation, neither will the Fed. News & Insights Freshly Squeezed - [11 Best Cryptocurrency Stocks To Buy According To Hedge Funds]( - [US Supply Chain Crisis Hits A New Level, Biden Administration Considers Deploying National Guard To Help]( - [Are We Really Crazy Enough to Believe This Is Going to Work?]( [Make sure to sign up for The Juice to keep receiving our premier investment newsletter.]( # [submit to reddit]( [submit to reddit]( [submit to reddit]( To ensure delivery of all emails, [whitelist us](. Update your email preferences or unsubscribe [here](. 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