Chart of Inflation versus the P/E ratio of the S&P 500 showing that the stock market does not react well to rising inflation at all. Note the contraction of the P/E ratio of the S&P 500 in the 1970's when inflation last truly was roaring:
The stock market has in the past fallen in face of rising inflation, or at best become range bound, as investors use investment dollars to chase rising yields in all kinds of bonds rather than investing in stocks as they have been doing in these low rate times.
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