Downtown Josh Brown

And so but I don't think that that's where the productivity is coming from quite yet.

But I do think that wage growth has been restrained.

Productivity is on the uptrend.

And that usually makes corporate America more profitable.

Again, back to just relationships.

Right.

And then you add in that fact, too.

So you go, OK, so then these are the expectations.

You know, they continue.

But yet we're seeing this persistent fear in the equity market and this multiple compression saying that some people are already pricing in the fact that it won't continue.

meaning that there's already the fear that there are these risks.

So you end up in the same situation where the forward drivers do suggest that it's more likely than not that profit margins are higher rather than lower, and the market doesn't believe it.

That's correct.

I think it's a unique setup in the sense that there's been a big divergence between cap-weighted earnings growth and equal-weighted earnings growth.

And while cap-weighted earnings growth has been, you know,

fine and good for the last three years, equal weighted earnings growth has actually been contractionary from a duration perspective.

Correct.

And I would say not only the same earnings boost, we're actually seeing earnings decline.

From not a magnitude perspective like we saw in other recessions, but from a duration perspective, it was as long as those recessions.

So that's why like 2022 was kind of recessionary from a corporate America profit perspective.