"However, more general supply chain disruptions are likely to continue in the shorter term, especially if there are additional Covid waves," she added. Hooper noted that some shortages, of semiconductors in particular, could improve soon, with projections for a return to normal levels of production by the second quarter of 2022. "Financials may be the standouts in this environment, especially as these companies would welcome higher yields. Another differentiating factor may be how much investment companies have made in technology to increase productivity." That should include growth sectors such as tech and health care," she said, adding that "unfortunately, those sectors' stock prices may temporarily suffer as bond yields rise." A rise in cost will generally have the greatest impact on low-margin companies, which tend to be found in sectors such as transportation, general retail, construction and autos. Companies that should be least impacted are those with wide profit margins, limited raw material costs and small workforces.
"However, some companies will be far more impacted than others. "No matter where companies are, they are likely experiencing supply chain disruptions, higher input costs and some issues sourcing labor," she said in a note last Thursday.
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