Inflation Fuels Earnings Expansion for Some Stock Investors
- Rising commodity prices sign of ‘robust economic growth’
- Equity, commodity indexes remain positively correlated
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Fear of inflation might spook savers, but some stock investors see rising prices as an opportunity for companies to pad their earnings.
That’s the takeaway from Jim Paulsen, chief investment strategist at Leuthold Group, in a July 23 note. Paulsen points to the rolling 26-week correlation between the S&P 500 Index and the S&P GSCI U.S. Commodity Price Index, which has remained strongly positive throughout the global Covid-19 pandemic.