Company Name by Dwayne Clark, Business card Visiting card Logo, business card, template, business Woman, simple png 898x1039px 75.82KB.QR code, Business card Logo Graphic design, business card, angle, text, orange png 2156x2780px 106.53KB.Brochure Poster Template, creative business poster material, flyer design wall art, angle, business Woman, text png 951x1344px 97.42KB.Graphic Design, Graphic Designer Business Card Design, Graphic design, electronics, gadget, web Design png 920圆13px 508.69KB.Business card Visiting card Logo Page layout, business card, red, white, and black business card template screenshot, template, business Woman, text png 949x1281px 107.13KB.Energy : In the early stages of an inflationary cycle, Energy typically benefits from the same factor that drives overall prices higher: demand that outstrips supply. Sectors that may benefit from higher inflationġ. This table is for illustrative purposes only. The Communications Services sector is not included due to the significant change in the constituents in 2018 that likely makes historical comparison meaningless. Qualitative analysis uses subjective judgment to analyze a subject to draw conclusions based solely or in part on non-quantifiable information. Due to limited data availability prior to 1989, data going back to 1972 provided by multiple sources with differing criteria were combined to produce a qualitative characterization. This illustration represents a hypothetical scenario of generally high and/or rising inflation () and a qualitative characterization as to what sectors could outperform (+), underperform (-), or possibly not follow historical patterns (?). Source: Charles Schwab & Co, Bloomberg, Center for Research in Security Prices (CRSP) compiled by Kenneth R. Hypothetical sector relative performance during a period of high inflation To be clear, we don’t think that we are currently in the more dire inflationary scenario, but the market might periodically reflect investors’ worries that we are going down that path-so let’s take a look at how various sectors might perform, and why. However, technology has become so integral to daily life and the overall economy-more so during the pandemic, when working remotely, shopping online, and streaming entertainment became ubiquitous-that the sector may react differently to high inflation going forward. For example, Information Technology historically has struggled when inflation was high and rising. The lopsided impact of the COVID-19 pandemic could alter some historical patterns. Of course, there are always extenuating circumstances that make every inflationary cycle different. Others such as Consumer Discretionary, Industrials, Materials and Financials have struggled in general. When inflation is stubbornly high, sectors such as Energy, Real Estate, Health Care, Utilities, and Consumer Staples historically have outperformed on average. In every market environment there tend to be winners and losers, and inflationary periods are no exception.
We don’t believe a return to 1970s-style inflation is likely, but there is a worrisome scenario in which persistently sharp increases in prices could be a factor to reckon with-and if history is any guide, they could have an impact on sector performance.
Signs are growing that inflation may be more tenacious than originally expected. It is published on a monthly basis and is designed for investors looking for tactical ideas. Schwab Sector Views is our three- to six-month outlook for stock sectors, which represent broad sectors of the economy.
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