For investors worried about rising costs biting into corporate margins, J.P. Morgan said don’t worry.
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Margins are looking stretched with headline EPS margins moving up consecutively over the last few years, making investors believe they can only go lower from here. Adding to the concerns is the late stage of the economic cycle and the increasing pressure from higher costs. Although lower margins are on the horizon, the impact will be limited and it will create buying opportunities, according to J.P. Morgan’s equity strategist Mislav Matejka.