Nominal GDP growth and nominal corporate earnings growth do tend to move together most of the time, with the second being an amplified version of the first. But only most of the time, only when income distribution is stable and corporate accounting is honest:

And so I think this gets it wrong:

From the very sharp Torsten Slok, again (I find him arresting my attention rather frequently these days). He comments:

Torsten Slok: 10% Nominal GDP Growth Coming? <https://www.apollo.com/wealth/insights-news/insights/daily-spark/10-percent-nominal-gdp-growth-coming>: ‘Nominal GDP growth is currently solid at around 6%, while S&P 500 earnings growth has surged to nearly 40% YoY. A simple regression based on the historical relationship between the two suggests that the current pace of earnings growth is consistent with nominal GDP growth of 10%, see chart below…. [If so, then] interest rates will stay higher for longer, particularly when combined with the ongoing fiscal challenges…

But I think this is wrong. I do not see the flood of demand coming that would drive such a huge spending acceleration and rapid runup in inflation. What I see, instead, is a shift from labor to capital. That appears to be one thing that Trump is managing to create.

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