Rueters Business News:

https://www.reuters.com/article/us-usa-stocks-weekahead/investors-focusing-on-profit-margins-as-rising-prices-wages-start-to-bite-idUSKCN1J41F3

"But a shift in investor focus may now be occurring as the impact of U.S. corporate tax cuts encourages more spending and 10 years of ultra-low interest rates have stimulated economic growth and finally begun to push up prices and wages.  

Large corporate tax cuts enacted last year boosted already hefty corporate profits, making most companies’ results look better by after-tax measures, but the benefit of the tax cuts also enabled companies to spend on talent and market share, sometimes raising expenses. "

"The other driver for investors’ increased focus on pre-tax margins may be inflation as industrial companies are forced to pay more for raw materials and companies dependent on consumer demand pay more in wages. 

Tom Dorsey, co-founder of Dorsey, Wright & Associates LLC, said today’s market dynamics remind him of those in the mid-1970s when he started in the investment business. U.S. inflation skyrocketed during that decade, with oil prices spiking higher. 

“The same kind of thing is beginning to happen,” Dorsey told Reuters. 

Investors, he said, “could easily lose a lot of equity in stocks they want to hold on to because of (their dividends).”