DM Monthly Report – May 2022

INFLATION, INTEREST RATES, AND STOCKS – As everyone knows well by now, the equity market has been presented with much to worry about in a very short space of time. Paramount among concerns is surging inflation, which is almost certainly a by-product of the extraordinary conditions brought about by the Covid crisis and which is definitely being exacerbated by the war in Ukraine.

Inflation on its own, however, is not necessarily perilous for a business and companies that can boost selling prices for their products and services by more than input costs are rising may even thrive in such an environment. Instead, it’s the eventual jump in interest rates that most often trips up stock prices in an inflationary environment.

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