Bloomberg Intelligence's 'Equity Market Minute' 6/16/2023

Gina Martin Adams discusses how inflation, which was challenging for stocks last year, is now supporting equities in 2023. She presents data showing how margin forecasts for S&P 500 companies align with inflation trends, highlighting improvements in pricing power since January. The video also examines the significant improvement in operating margins, particularly in consumer-related sectors. Communication services and consumer discretionary sectors have shown strong performance, with stocks rising significantly in 2023. The video concludes with a summary of these trends in the equity market.

How did inflation impact stocks last year, and what is its role in 2023?

• It created favorable conditions last year and continues to do so.

• It had no impact last year and remains neutral.

• It created difficult conditions last year but is now supportive.

• It was supportive last year but is now creating challenges.

What does the inflation spread between consumer and producer prices indicate?

• A measure of stock market volatility.

• A decrease in consumer spending.

• An increase in producer costs.

• A proxy for pricing power for S&P 500 companies.

Which prices are decelerating faster, leading to improved operating margins?

• Consumer prices

• Neither, prices are stable

• Both consumer and producer prices equally

• Producer prices

Which sectors have shown significant improvement in operating margin trends in 2023?

• Energy and Industrials

• Financials and Real Estate

• Communication Services and Consumer Discretionary

• Healthcare and Utilities

What is the approximate year-to-date gain for consumer discretionary stocks?

• 40%

• 30%

• 20%

• 10%