All 21 energy stocks in the S&P 500 have reported quarterly earnings, beating aggregate earnings expectations by more than 14%, the second highest of any sector in the S&P 500.

Overall, energy stocks have tended to sell off around 1.6% on average in the five trading days following their release. Nonetheless, that looks like little more than a minor bout of profit-taking when you consider energy remains the top-performing groupmind the S&P 500 on a trailing 12-month, year-to-date and even quarter-to-date basis.

As we’ve written before in Energy & Income Advisor, the producers tend to lead in the early stages of a new energy upcycle with the rally then broadening out to include other groups like services and refiners. We see clear evidence in Q3 results that we’re reaching that inflection point for several key groups.

For the first time in four decades, inflation is a key risk in the US and other developed economies.

Indeed, according to the University of Michigan survey, US consumers expect annualized inflation of close to 3% over the long haul, a full 1% above the Fed’s 2% target level.

Meanwhile, more than 50% of small businesses in the National Federation of Independent Business (NFIB) survey reported that job openings were hard to fill in the month of August 2021, the highest reading in the history of this survey dating back to 1973.

Rising labor costs prompted FedEx (NYSE: FDX) to slash guidance in September while expectations for Q3 2021 US economic growth have plummeted since August as many fret that rising prices are beginning to pinch the consumer.

Where do you find stocks offering near double-digit yields backed by businesses repeatedly posting strong results? In this zero interest rate environment, our answer would ordinarily be “dream on.” But that’s exactly the kind of value the Energy and Income Advisor Model Portfolio and High Yield Energy Target List offer now. And Q2 numbers and guidance updates have once again proven their financial strength and upside leverage to the energy price cycle. This issue’s Portfolio section has the run down for the 23 Portfolio and High Yield List companies that had not reported as of our previous EIA issue—where we unpacked results for Kinder Morgan Inc (NYSE: KMI), Schlumberger Ltd (NYSE: SLB) and Texas Instruments (NYSE: TXN).