Indeed, the problems in the supply chains and the rise in raw materials are leading to high inflation in all products and services. The lack of labor is driving up wages, especially in the United States (for now). You should know that dSince the 1950s, whenever inflation has exceeded 4% and the unemployment rate has been below 5%, the US economy has experienced a recession within two years. Inflation is now 8.3% over one year and the unemployment rate is 3.6% in the United States. A recession, i.e. a decline in growth for two quarters consecutiveassociated with high inflation therefore seems entirely possible.
Bank of America has highlighted 50 companies in the broad US S&P 500 index with the best historical relative performance during periods of stagflation based on stocks with data dating back to 1968 (148 companies out of the 500 in the current index ).
As a reminder, stagflation is the situation of an economy that simultaneously suffers from low or no economic growth and high inflation. The most significant periods in stock market history are the two oil shocks (1972-1975 and 1978-1982), but also 2007-2008. Even if the two oil shocks referred more to a supply shock, while we are more in a demand shock, it is always interesting to look at the stocks that performed well during these periods.
Here is the list of US stocks with their median annualized performance during these periods of stagflation: