XLC - Top stocks with pricing power for a sputtering reflation trade: Alpha Tactics
Wall Street got the hot consumer inflation data it expected this past week, but the reaction of the stock and bond markets underscored doubt in the reflation trade.The CPI showed May annual inflation of 5%, with the core up 3.8%.The debate among economists persisted as to how much of the price increases are transitory, but the market looks to be leaning with the Fed's wait-and-see assessment for now.Treasury yields (TBT) (TLT) dropped, while cyclical stocks that have been the fixtures of the reflation trade struggled.Financials (XLF) was the worst-performing sector last week, followed by Materials (XLB) and Industrials (XLI).UBS said this week the reflation trade has outperformed, "but as inflation puts pressure on costs, the momentum may stall, and lead to a rotation into strong pricing power companies.""With inflation at the tipping point where the correlation flips from being good to bad for equities, we believe stocks which have greater
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Top stocks with pricing power for a sputtering reflation trade: Alpha Tactics