Gross Margin: S&P 500 Large Cap vs. S&P 600 Small Cap and S&P 400 Mid Cap Gross margins between large and small caps are widening. Industries with highest concentrations are getting all of the gross margin improvement. Image: Arbor Research & Trading LLC
U.S. NIPA Profit Margins and Recessions Chart showing the longest margin contraction in post-war history, for nearly 5 years. Image: Oxford Economics
Profit Margins of S&P Large Caps and Small Caps Profit margins between small and large caps are widening. Industries with highest concentrations are getting all of the profit margin improvement. Image: Arbor Research & Trading LLC
S&P 500 and Margin Debt Margin debt has still not recovered from last December’s lows. Usually, it is mostly bullish for stocks, because investors are still fearful. Image: Merk Investments
S&P 500 Adjusted Net Profit Margin and Info Tech Margins Info Tech margins are twice as high as S&P 500 margins. Image: Goldman Sachs Global Investment Research
Earnings, Margins and Valuation Considering earnings growth, operating margin and valuation, the S&P 500 should remain under pressure until Q3 earnings season. Image: Fidelity Investments
U.S. Corporate Profit Margin and Recession The chart shows a U.S. corporate profit margin proxy. If it declines below 10% in this business cycle (red line), it could suggest a coming recession.
Margin Debt and S&P 500 This chart shows that margin debt has not recovered from last December’s lows, while the stock market has risen sharply.Usually, it is mostly bullish for stocks, because investors are still fearful. Image: Yardeni Research, Inc.
Increased Productivity Boosts Profits Margins When a company increases productivity, it makes more products without increasing costs. Higher productivity can improve the company’s profit margin and total profits. During this business cycle, productivity has increased at an average rate of 1.3% year-over-year. But productivity has been cut in half since the previous business cycle. You…
Expected Fed Funds Rate Fed funds futures for January 2021 imply an expected rate of 1.32%. Click the Image to Enlarge