Investors fear inflation, higher yields may make U.S. equities 'dead money'

Golub expects the S&P 500 to end the year near 4,050, about 1.5% above its current level, and offer annual returns in the low single digits through at least 2025 as inflation falls more gradually than many investors expect.

For now, markets are pricing in a nearly 75% chance that the Fed raises rates by 50 basis points at its March 22 meeting, to a range of 5.00 to 5.25%, compared with the 9% chance seen a month ago. Pricing for how high the Fed will ultimately take rates has also shifted, with investors now seeing a 56% chance the central bank brings rates to 5.75% and a 32% chance it takes rates as high as 6%.

At the same time, history suggests that when the yield of the 3-month Treasury bill rises above that of the S&P 500 - as happened early this year for the first time since the dot com bubble - cash typically outperforms equities, analysts at Capital Economics wrote in a note Thursday. “You can still make money in stocks, but you need to be in the right segment,” said Nancy Tengler, CEO & CIO of Laffer Tengler Investments, in a recent note. “So cyclicals do well in this particular environment, and that's what we're focused on.”

I call BS American companies are making more profit in the last 3 years than ever before, have jacked up prices to consumers while cutting overhead all while CEOs take home record salaries and bonuses greedistheircreed

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