Corporate Profits – S&P 500 Index Trailing 12-Mo. Operating Margin and U.S. CPI Less U.S. PPI The gap between CPI and PPI is deeply negative. Are U.S. coporate profits at risk in the next 12 months? Image: Morgan Stanley Wealth Management
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…
S&P 500 Operating Margins The profitability of S&P 500 companies seems to have peaked. Image: Morgan Stanley Wealth Management
Median S&P 500 Company Year/Year EBIT Margin Growth (Excluding Financials and Energy) Profit margins for the median S&P 500 firm are expected to decline significantly. Image: Goldman Sachs Global Investment Research
S&P 500 Quarterly Operating Margin Will S&P 500 corporate profits keep growing? Image: Deutsche Bank Asset Allocation
ISM Manufacturing PMI and S&P 500 Operating Margin The Manufacturing Purchasing Managers Index has peaked. Will S&P 500 operating profit margins roll over? Image: Morgan Stanley Wealth Management
After-Tax Corporate Profits as a Share of GDP Profit margins have risen sharply to an all-time high in the third quarter of 2021. Image: Goldman Sachs Global Investment Research
S&P 500 Operating Earnings and NIPA Corporate Profits Goldman Sachs expects S&P 500 margins to rise slightly in 2020. Image: Goldman Sachs Global Investment Research
Global Nominal GDP and Corporate Profits This chart shows the correlation and the slowdown in global growth and corporate profits. Historically, margin pressures have preceded the start of recessions. Image: J.P. Morgan
Inflation – Single Most Important Problem Facing Small Business Owners Inflation is supposed to reduce profit margins. Image: BCA Research