US wages may impact the equity markets, said Rob Subbaraman of Nomura.

In an interview with CNBC, he said that spillback effect from emerging markets is getting bigger in size, which may reflect on corporate earnings.

“We have already seen the unemployment rate drop to the lowest since the mid 1960s and the first thing that will show up is in wages and not prices,” he said.

He added, “One thing to keep in mind is that EM overall is getting bigger and bigger and the US companies, multinationals are more and more integrated, invested in EM, so the spillback effects from EMs on to these developed markets is getting bigger but it is hard to tell exactly how much and the first place we will see that is probably in corporate profit results before we start to see that in hard economic data.”