  rising interest rates and oil prices appear to be raising fears among foreign and domestic investors   analysts are hoping inflation subsides later in the year as the covid19 supply chain bottlenecks open up equity index futures are pointing to a lower open and are not being helped by earnings announcements from major financial companies goldman sachs gs reported lowerthanexpected earnings despite strongerthanexpected revenue meanwhile pnc financial pnc missed on revenue but beat on earnings truist financial tfc beat on earnings and hit the revenue estimate on the nose finally bank of ny mellon bk beat on both top and bottom line numbers the respective stock prices are mixed in premarket trading goldman was down 376 pnc was also down 020 truist was up 013 and mellon fell 096 financials were expected to see higher profits because of favorable interest rates however goldman saw a 13 decline profit like jp morgan jpm and citigroup c last week goldman saw a boost in investment banking revenue from mergers and acquisitions but revenue from stock trading was down in the previous quarter and bond trading revenue was flat while earnings announcements don’t seem to be helping equity index futures appear to be falling on rising yields the 2year treasury yield rose to 1024 matching its february 2020 level while the 10year treasury yield tnx hit its twoyear high at 1813 before the open the rise in the twoyear may be the biggest driver of fear because it’s often seen as a reflection of where the fed is heading the move over 1 is higher than the fed’s goal of 090 for the overnight rate at the end of 2022 so what we may be seeing here is a resetting of asset values based on the potential of more and higher rate hikes growth stocks like tesla tsla twitter twtr and meta platforms fb are lower in premarket trading which could be seen as evidence of revaluations the cboe market volatility index vix is signaling investor concerns jumping more than 12 in premarket trading to 2152 fears may be compounded by rising oil prices which rose 172 ahead of the bell and reached 8482 per barrel oil is now testing its 2021 highs and at one point was trading at a sevenyear high rising yields appear to be dragging stocks lower overseas the european stoxx 600 fell more than 1 overnight and the bse sensex fell 090 european markets were hit by german bunds bonds yields hitting a sevenyear high additionally reuters reported that asian stocks sold off as us yields were rising in premarket trading one growth stock that is rising is activison blizzard atvi which was up 3764 in premarket trading microsoft msft announced plans to acquire the gaming company for 95 per share for a total value of 687 billion the deal will make microsoft the thirdlargest gaming company by revenue rising inflation can have an insidious effect on the economy with rising input prices consumers can purchase fewer goods profits decline and the economy can slow until a level of economic equilibrium is reached rising prices are definitely a key discussion right now and it’s hard to not be concerned although many analysts are expecting inflation to taper off this year consumers are seeing a noticeable price difference in a number of their purchases from a year ago the consumer price index cpi which measures what consumers pay for goods and services rose 68 from a year ago according to the bureau of labor statistics it’s the fastest annual rise in 40 years the data shows that prices are up in nearly every category including energy shelter transportation services food and new and used cars as expected energy commodities were the main driver with a 12month percentage change of 489 meat poultry fish and eggs rose 125 over the same period causes the covid19 pandemic sent shock waves across the global economy disrupting a number of supply chains and contributing to significant shipping delays furthering the problem we saw labor shortages combined with increased consumer demand with a number of items in short supply and transportation costs climbing prices increased broadly speaking inflation is effectively the result of an increase in production costs or an increase in demand for products and services for consumers inflation is a concern as money saved today becomes less valuable tomorrow eroding purchasing power and even delaying retirement for most families one of the first places inflation will be felt is in the rising costs of food and energy according to data from the us department of agriculture in 2020 consumers spent roughly 10 of their income on food then add another 5 to 8 of disposable income for energy costs thus a rise in prices no matter how small can translate into less money for other products less money to save or even less money to pay down debt on the plus side some analysts are expecting more supply chain issues to wane this year which could have a direct impact on current inflation levels furthermore the federal reserve is of the belief that inflation is likely to be more temporary than it is long term benefits during an inflationary period investors who hold assets that are also affected by inflationary pressures will frequently generate aboveaverage returns in the market case in point the light sweet crude oil futures contract handily outperformed all market indices last year climbing more than 55 generally speaking companies will benefit from inflation by charging more for their products and services when demand increases for example when the economy is strong demand for homes is often higher which allows homebuilders to increase the price of a house this pricing power will have a positive impact on a company’s profit margin allowing them to charge more for products than the underlying increase in production costs it’s important to note that businesses will be negatively impacted by inflation if they’re unable to pass along their higher production costs to consumers so depending on the product or service being offered if demand drops with a price increase then the company will have to absorb the cost which will lower its profit margins and ultimately reduce its profitability