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Warren Buffett is right, inflation is running rampant
[MSN] Inflation looks to be in warp overdrive judging by the worrying commentary by corporate chieftains this earnings season. Anybody who's bought groceries has noticed this. Mentions of inflation on first quarter corporate earnings calls have went kaboom!800% year-over-year, according to new research from Bank of America Securities strategist Savita Subramanian. By sector, inflation was most prevalent in materials, consumer and industrial companies. Most sectors have cited inflation more than the historical norm, Subramanian notes. If there's 1.2T in circulation and you put another 1.9T in circulation, what's your inflation rate? Bob? (Quick answer if your name's Mugabe: 146.15 percent) Some of the biggest jumps in inflation mention were tied to transportation, materials and labor outlays. Transportation->feed costs->-transportation->meat->transportation->groceries So far, inflation hasn't crushed the bottom lines of companies as the world economies are roaring back and demand is strong for goods and services. "Higher mentions of pricing, coupled with a record net margin, suggest inflation so far has been positive for corporate earnings," Subramanian says. Out of the 303 companies from the S&P 500 that have reported, earnings growth is tracking up 41% BofA's data shows. BofA's data highlights a serious pickup in inflation being felt throughout corporate America, which could pressure profits later this year as economic growth cools. "We are seeing substantial inflation," Berkshire Hathaway CEO Warren Buffett said at the Berkshire Hathaway annual shareholder meeting exclusively live-streamed by Yahoo Finance. "We are raising prices. People are raising prices to us, and it's being accepted." Buffett called out much higher steel costs impacting Berkshire's housing and furniture businesses. Posted by: Fred 2021-05-05 |
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