Higher inputs costs and demand destruction from inflation (and the Federal Reserve's interest rate hikes) are resulting in margin compression for companies, pinching their profits.
As a result, companies are revising downwards their future earnings expectations.
So as Q2 earnings calls start happening over the next few weeks, expect a tsunami of these revisions to force Wall Street analysts to downgrade their target prices for many stocks.
Will this be the next big shoe to drop that will force stock prices down even further?
It sure looks so.
Financial advisor Lance Roberts and I tackle this topic, as well as Fed policy, recession risk, and America's massive retirement problem in this week's wide-ranging Market Update.
For your weekly dose of what mattered most this week, watch our latest Weekly Market Recap featuring Lance Roberts.