Below is a chart and brief excerpt from today's Early Look written by Hedgeye CEO Keith McCullough.
When A) wage inflation #accelerates to #LateCycle highs and B) your revenues slow. It’s called margin compression. Only people who have never built and/or ran a company don’t quite fully get the cyclicality of that.
Longer-term, as you can see in today’s Chart of The Day (slide 40 in our Q4 Macro Themes deck):
A) Profits = black line
And there are substantial cyclical and secular takeaways from this basic economic relationship: