Companies that benefited significantly from the inflationary spike in the past two years may lose the power to charge higher prices for their goods and services, a headwind for their stocks and the equity markets in the remainder of 2023, according to strategists at JPMorgan Chase & Co.
The general sentiment was that the 40-year-high inflation rate would hurt corporate profitability as a range of input costs spiked. However, that didn’t materialize in the past two years because corporations managed to use elevated input costs as a source of pricing power, and consumers were willing to accept it, Matejka and his team said, in a Monday note.
“There is a risk of reversal, especially if final demand stalls, potentially if countries’ PMI softness continues, and as supply chains have normalized,” they added. Energy prices soared to right above the $90-a-barrel threshold for both the West Texas Intermediate crude and Brent crude in September from around $70 per barrel for both the West Texas Intermediate crude and Brent crude in late June.
Canada Canada Latest News, Canada Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: MarketWatch - 🏆 3. / 97 Read more »