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‘Greedflation’ Probably On Borrowed Time
I've been on (and on, and on) about so-called "Greedflation."
Whenever something goes wrong in the world, we naturally look for someone to blame. Currently, a lot's wrong, and in some cases placing blame is pretty straightforward.
Notwithstanding Chinese defense minister Li Shangfu's contention that Vladimir Putin has made "important contributions to promoting world peace," I think it's fair to suggest the Kremlin bears quite a bit of responsibility for the war in Ukraine, and thereby for heig
“ an index like the S&P 500, in particular, which is over-indexed to discretionary goods from a revenue and market cap standpoint “
This is a good point. While the US economy is dominated by services, the S&P 500 is dominated by goods, even if those are increasingly digital rather than physical. The largest service category, shelter, has very little representation in the index. US inflation is currently driven by services, but the Fed’s blunt instruments pressure demand for goods and services alike. As supply chains for goods have deblocked, the “services supply chain” – labor and shelter – remains problematic and expensive.
In the S&P 500’s favor is the size and quality of index constituents. If you have to be a goods producer facing Fed tightening driven by services inflation, best to be one of the biggest and best (economically speaking) companies in America, rather than a small producer.