One of the biggest worries for investors right now is margins.
Input prices are certainly rising, and there’s no evidence (yet) that companies are able to pass them through.
We just learned that core PPI (excluding interest rates) jumped 0.5%, the hottest move since 2008.
Tomorrow we get CPI, and the core rate is estimated at 0.1%, which — if it comes out that way — means there’s a huge gap between input price inflation and what end users are paying.
Of course, we’ve heard this story several times during earnings season, and the market has digested it pretty well so far.