JesseC
2021-12-12
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Is Inflation Going to Cool Down Anytime Soon?
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In this segment of<i> Backstage Pass</i>, recorded on <b>Nov. 10</b>, Fool contributors Connor Allen and Rachel Warren discuss inflation and investing in this challenging market environment.</p>\n<p><b>Connor Allen</b>: But to go back to the original question about transitory inflation, I think most people have hopped off that bus by now. I think right when this started, a lot of people were on the transitory bus. They thought a lot of the bottlenecks and the supply chain issues that were being caused we're going to get solved and basically deflation will come and replace that and prices would go back to normal. I don't think a lot of people think that anymore.</p>\n<p>Because when you think about a company that's selling a product, and they realize that the market will pay $5 for something that used to be $3 and are they ever going to bring it back to $3? I don't think so. I think that's hard to make companies do, especially when there's such a variety of costs across all industries and all companies. You don't know what costs are going to come down when.</p>\n<p>Gas is <a href=\"https://laohu8.com/S/AONE.U\">one</a> that's a major issue. I think that probably is the number one issue for a lot of increasing costs for companies because everything's delivered, whether it's delivered to a warehouse like <b>Amazon</b>, whether it's delivered to a retail store like <b>Macy's</b>, or whether it's delivered to your home. There's a lot of different things and the cost obviously of gas being I think it's around a national averaged around $3.20 I believe.</p>\n<p>That's a cost that you can't get around, and you can't really innovate around those gas prices. Obviously, electric vehicles could potentially be that fix, but those costs are going up as well. [laughs] There's some projections that I was reading about how the national average of gas prices could be around $5 a gallon by the end of the year.</p>\n<p>That could be really painful, not only on my wallet, but [laughs] not on a lot of Americans' wallets. Hopefully we can get that down. But to be honest with you, I'm expecting long-term inflation. I'm not expecting this to be a transitory thing.</p>\n<p><b>Rachel Warren:</b> I agree with you Connor and unfortunately, I don't really see this inflation just dying down overnight or going anywhere anytime soon. I think it's going to be much more of a gradual recovery and perhaps in some cases like what you were saying, we're going to see permanent pricing increases in some of these consumer good categories.</p>\n<p>I think it's something that businesses and consumers are going to have to contend with for a long time. I think people are adjusting to these changes hard as they are. I think it's also helpful to remember this isn't just a U.S. issue. This is a global problem for companies and consumers.</p>\n<p>I saw this interesting article on <i>CNBC</i> today and the Chief Financial Officer of a large Belgian Dutch grocer called <b>Ahold Delhaize</b> was talking about how the company is dealing with the supply chain bottlenecks that are also having this impact on inflation and everything else and she said, \"I think what we're definitely seeing is inflation is picking up. But what I would also say is that when you look at food at the smaller share of the wallet in some other categories.\"</p>\n<p>Another thing was, a lot of these companies are saying this is something we are going to be seeing for quite a long time. The CEO of <b>Siemens</b> <b>Energy</b> told <i>CNBC</i>, the industrial world is going to be dealing with the supply chain bottleneck issues for a long time, which is also driving these other inflation problems. I don't think it's something that's going anywhere, anytime soon.</p>\n<p>As a consumer, it's obviously not fun to see. I think it's something to be patient with and deal with as it comes. But jumping off of what Taylor was saying in terms of staying invested in the stock market, but maybe you do adjust the type of stocks that you buy during these times and sometimes especially during bumpy periods in the market, it can be a good time to look at your portfolio and see maybe it needs some rebalancing.</p>\n<p>Maybe the balance of stocks that are more prone to headwinds during these bumpy times could use some balancing with more stalwart stocks that aren't necessarily as prone to these inflationary pressures. I think even amid rising prices and high inflation, you think of companies like Amazon that reported impacted earnings due to related supply chain constraints. The market still managed to deliver record highs.</p>\n<p>Recently over the last few weeks we had that happen a couple of times. Try not to focus too much on one day in the stock market. When you look at the market performance over the long term, investors who they'd invested in the market has generated pretty great portfolio returns. I'm personally not changing the way I'm investing right now, but I may change some of the type of stocks I buy in the coming months for sure.</p>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Is Inflation Going to Cool Down Anytime Soon?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIs Inflation Going to Cool Down Anytime Soon?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-12-12 11:36 GMT+8 <a href=https://www.fool.com/investing/2021/12/11/is-inflation-going-to-cool-down-anytime-soon/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Investors and the general public as a whole are worried about the surging rate of inflation, and these concerns continue to drive some of the volatility we're seeing in the broader market. In this ...</p>\n\n<a href=\"https://www.fool.com/investing/2021/12/11/is-inflation-going-to-cool-down-anytime-soon/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.fool.com/investing/2021/12/11/is-inflation-going-to-cool-down-anytime-soon/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2190719916","content_text":"Investors and the general public as a whole are worried about the surging rate of inflation, and these concerns continue to drive some of the volatility we're seeing in the broader market. In this segment of Backstage Pass, recorded on Nov. 10, Fool contributors Connor Allen and Rachel Warren discuss inflation and investing in this challenging market environment.\nConnor Allen: But to go back to the original question about transitory inflation, I think most people have hopped off that bus by now. I think right when this started, a lot of people were on the transitory bus. They thought a lot of the bottlenecks and the supply chain issues that were being caused we're going to get solved and basically deflation will come and replace that and prices would go back to normal. I don't think a lot of people think that anymore.\nBecause when you think about a company that's selling a product, and they realize that the market will pay $5 for something that used to be $3 and are they ever going to bring it back to $3? I don't think so. I think that's hard to make companies do, especially when there's such a variety of costs across all industries and all companies. You don't know what costs are going to come down when.\nGas is one that's a major issue. I think that probably is the number one issue for a lot of increasing costs for companies because everything's delivered, whether it's delivered to a warehouse like Amazon, whether it's delivered to a retail store like Macy's, or whether it's delivered to your home. There's a lot of different things and the cost obviously of gas being I think it's around a national averaged around $3.20 I believe.\nThat's a cost that you can't get around, and you can't really innovate around those gas prices. Obviously, electric vehicles could potentially be that fix, but those costs are going up as well. [laughs] There's some projections that I was reading about how the national average of gas prices could be around $5 a gallon by the end of the year.\nThat could be really painful, not only on my wallet, but [laughs] not on a lot of Americans' wallets. Hopefully we can get that down. But to be honest with you, I'm expecting long-term inflation. I'm not expecting this to be a transitory thing.\nRachel Warren: I agree with you Connor and unfortunately, I don't really see this inflation just dying down overnight or going anywhere anytime soon. I think it's going to be much more of a gradual recovery and perhaps in some cases like what you were saying, we're going to see permanent pricing increases in some of these consumer good categories.\nI think it's something that businesses and consumers are going to have to contend with for a long time. I think people are adjusting to these changes hard as they are. I think it's also helpful to remember this isn't just a U.S. issue. This is a global problem for companies and consumers.\nI saw this interesting article on CNBC today and the Chief Financial Officer of a large Belgian Dutch grocer called Ahold Delhaize was talking about how the company is dealing with the supply chain bottlenecks that are also having this impact on inflation and everything else and she said, \"I think what we're definitely seeing is inflation is picking up. But what I would also say is that when you look at food at the smaller share of the wallet in some other categories.\"\nAnother thing was, a lot of these companies are saying this is something we are going to be seeing for quite a long time. The CEO of Siemens Energy told CNBC, the industrial world is going to be dealing with the supply chain bottleneck issues for a long time, which is also driving these other inflation problems. I don't think it's something that's going anywhere, anytime soon.\nAs a consumer, it's obviously not fun to see. I think it's something to be patient with and deal with as it comes. But jumping off of what Taylor was saying in terms of staying invested in the stock market, but maybe you do adjust the type of stocks that you buy during these times and sometimes especially during bumpy periods in the market, it can be a good time to look at your portfolio and see maybe it needs some rebalancing.\nMaybe the balance of stocks that are more prone to headwinds during these bumpy times could use some balancing with more stalwart stocks that aren't necessarily as prone to these inflationary pressures. I think even amid rising prices and high inflation, you think of companies like Amazon that reported impacted earnings due to related supply chain constraints. The market still managed to deliver record highs.\nRecently over the last few weeks we had that happen a couple of times. Try not to focus too much on one day in the stock market. When you look at the market performance over the long term, investors who they'd invested in the market has generated pretty great portfolio returns. I'm personally not changing the way I'm investing right now, but I may change some of the type of stocks I buy in the coming months for sure.","news_type":1},"isVote":1,"tweetType":1,"viewCount":714,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":2,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/604052769"}
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