Corporate profit data made for some really grim reading after the Easter break.
- Post Tax non-Financial Corporate Sector Profits Down 19% y/y
Why? Employee compensation share in output rising very rapidly now and crushing margins.
- So, margins and profit growth going exactly as the historical data set would imply:
- Unit profit data confirm the story.
All this from nose-bleed valuation – based upon valuation measures with a strong and consistent historical relationship with forward returns… and with the “China Crisis” still looming.
MONOGRAM CAPITAL MANAGEMENT