S&P 500 Operating EPS vs. USA National Income, Corporate Profits Thanks to buybacks, this chart clearly shows the current divergence. Is a new bubble being formed? Picture source: Nordea and Macrobond
U.S. Corporate Profits, Capital Expenditures, Dividends and Buybacks What would happen if U.S. companies reinvested instead of buying their own shares and paying dividends? Picture source: Financial Times
Japan Corporate Profits Leads MSCI World EPS This chart suggests that Japan corporate profits leads MSCI World EPS by 7 months. Picture source: Nordea and Macrobond
S&P 500 and NIPA Corporate Profits After Tax S&P 500 rose relative to NIPA corporate profits after tax, thanks to buybacks. Picture source: Morgan Stanley
U.S. Yield Curve Leads Corporate Profits This chart suggests that the U.S. 10-year less 3-month yield curve leads corporate profits by two years. Picture source: Oxford Economics, Macrobond
S&P 500 EPS vs. U.S. Nonfinancial Corporate Profits Creative accounting is imaginative ways to present accounts. The divergences between earnings and U.S. nonfinancial corporate profits occur before recessions. Picture source: Gavekal, Macrobond
Equity Market Driven by Bonds Not Profits The chart shows a widening gap between cyclicals and bond proxies. It is clearly a cyclical bear market within a bull market, as during the dotcom bubble. Picture source: Societe Generale Cross Asset Research
S&P 500 Operating Earnings / NIPA Profits and S&P 500 Returns Interesting chart suggesting that S&P500 2-year returns will be negative, as they were in the late 1990s, when S&P 500 operating earnings rose relative to NIPA profits (thanks to buybacks). Picture source: Oxford Economics, Macrobond
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…
Number of Small-Cap M&A Deals At 10-Year High The number of small-cap deals is expected to continue to grow, because CEOs are under pressure to increase profits Picture source: Legg Mason
