With Q3 earnings season winding down, it is safe to say that even though 3Q earnings came in sold, rising about 26% Y/Y, they are providing little support for the market. Companies that beat on both EPS and sales have seen scant rewards, while companies that missed have been viciously punished. The reason for this is Wall Street’s growing obsession with “peak earnings” which, in a time of stable revenues, means rising concerns about profit margins. Not surprisingly, Goldman’s chief equity strategist David Kostin dedicated his last Weekly Kickstart note to what companies laid out as the three main sources of margin pressure going into 2019, which were as follows: (1) increased tariff rates, (2) a tight labor market, and
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