Which sectors might perform better in high inflation?

U.S. stocks slipped after May's consumer price index was released. Investors continue to assess the influence of inflation on the Fed's monetary tightening path.

The key inflation reading was 8.6%, higher than March's 8.5% and April's 8.3%. The number indicated that inflation did not reach its peak and is still at a high level in U.S. history. It measures price change for goods and services paid by U.S. consumers.

Will inflation remain high in 2022? And which sector might perform better in high inflation?


Inflation is expected to remain high

Treasury Secretary Janet Yellen said on June 7 that inflation is expected to remain high. And maybe higher than the Biden administration's forecast that inflation would average 4.7% this year.

At the same time, the World Bank warned that high global inflation would continue. "Global inflation is expected to moderate next year but it will likely remain above inflation targets in many economies," the World Bank said in a report.


If high inflation continues, which sectors might perform better?

According to a study on stock returns over the past 50 years, energy and materials outperform all sectors.

In three inflation-spike periods, energy stocks had the highest annualized returns of 18%. The second was 16.81% for materials stocks. Healthcare had the worst return of minus 8.44%.

And here is the sector performance in last six months, for reference.

How to use moomoo to check out these sectors?

You can easily check out these sectors by using moomoo.

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