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
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.
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 Quarterly Margin Growth in the high-margin tech sector, economies of scale, network effects, and supportive financial and regulatory environments—key structural shifts—have pushed the S&P 500’s profit margins to nearly a four-year high. Image: Deutsche Bank Asset Allocation
S&P 500 Operating Margin After the COVID-19 pandemic, the operating margins of companies in the S&P 500 have returned to a state of normalcy, leading to a positive trend of improved profitability and cash flows for these companies. Image: Morgan Stanley Wealth Management
U.S. EBIT Margin vs. ISM Manufacturing Prices Paid Index Profit margins are rarely sustained by falling inflation. Image: Morgan Stanley Wealth Management
S&P 500 Operating Margins Will the profitability of S&P 500 companies improve in the coming quarters? Image: Morgan Stanley Wealth Management
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
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