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Inflation moderated a tad in April, and so stocks that win historically when inflation eases could be big winners ahead if that trend continues. The consumer price index, which measures the cost of a broad swath of goods and services, rose 4.9% in April from last year, slightly less than the 5% Dow Jones estimate. The CPI reading has cooled considerably since peaking out around 9% in June 2022. The easing in inflation could give a boost to stocks that have historically tracked the opposite direction of rising prices, according to Bank of America analysis. The Wall Street firm created an “Anti-Inflation” screen with S & P 500 companies whose relative performance has a strong negative relationship — or beta — with inflation. Bank of America’s screen is based on inflation data going back to 1975. Amazon is on the top of the list with the strongest negative relationship to inflation. Th e-commerce giant has led the market rally this year, jumping nearly 27% as inflation shows signs of moderating. Some consumer discretionary names showed up in the screen, including Best Buy, O’Reilly Automotive, Ross Stores , Home Depot and Lowe’s Companies . Lower prices should boost demand at retailers and help them move inventory. Consumer staples should also benefit from easing inflation, including Clorox and Kroger , which have historically moved in opposite direction to inflation.
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