Medicare Agent News: The Shortage Watch

Tuesday, October 12, 2021

The Shortage Watch

By Alex Eule | Tuesday, October 12

Inflation and Earnings. Stocks fell for a third straight session today as inflation fears continue to gnaw at investors. The Dow Jones Industrial Average was off 118 points, or 0.3%, while the S&P 500 fell 0.2%

The impact of rising costs could begin to get more real in the coming weeks as companies report third-quarter results. Earnings season begins in earnest tomorrow morning, when banking giant JPMorgan Chase reports its numbers. From there, it's going to be hard to keep up. Most of the banking world will report over the coming week. Then airlines will be in focus during week 2. Week 3 will be dominated by tech.

No matter the numbers, earnings season could come with a silver lining. The wave of corporate news should give investors a reason to look beyond Washington, where the headlines have generated weeks of uncertainty about fiscal policy and the threat of a debt default.

Fastenal, an industrial parts distributor, showed the positive potential from earnings reports. In a warmup to earnings season, the company today reported results that matched Wall Street expectations. Shares still finished up 3.1%. Barron's Al Root notes that quarterly sales growth of 10% was the best number in more than a year. It's a positive sign, Al wrote, because "Fastenal sales are as close to a real-time read on demand that industrial investors can get."

Even so, headlines about inflation aren't going away. They're likely to be a major topic in the minutes released tomorrow from the latest meeting of the Federal Open Market Committee.

Also tomorrow, the Bureau of Labor Statistics is set to report September data for its consumer price index. Economists are forecasting a 0.3% gain from the prior month and a 5.3% rise from a year ago. Those growth figures would match the August numbers. While slower growth in prices could provide some relief to inflation worries, there's no guarantee on how stock markets will react. A month ago, the CPI numbers came in a bit lower than expected. While stocks initially rallied on the news, they still finished the day down, thanks to some concerning trends beneath the surface.

At the time, we noted worries that rising prices were not yet being passed on to consumers, which could result in lower corporate profit margins. If that's the case, we're certain to hear about it during earnings calls in the coming weeks.

Ultimately, everything comes down to earnings season. Get ready.