Quarterly report that came out today encapsulates the reason why a crash is inevitable.
Unit Labor Costs for the last quarter - expected 1.6%, actual 3.2% an exact doubling of expectations.
Non-Farm productivity for the Quarter = expected 2.6%, actual 1.7%
Doesn't take a genius to figure out all companies earnings use the above 2 methods to determine PROFIT growth. In NO instance is the above reading positive for any sector. Now we have higher spike in inflation and either companies pay their workers more to keep up with inflation or allow them to stagnate. Will the extraordinary tight labor market force them to comply? if not then stagnation will be seen in earnings and economic activity, as it already is with housing.
Nothing about the ongoing report and inflation projections allow for a healthy stock market let alone a thriving upside move. Only a matter of WHEN! At what point, instance, will trigger the lighting up of the EXIT signs.
