Sentences with phrase «corporate profit margins»

That puts pressure on corporate profit margins and theoretically should lead to higher inflation.

One of the most controversial stories of the economic recovery has been the historically high corporate profit margins.

However, when it comes to the current sustainability of corporate profit margins vs. past cycles, this time may truly be different.

Even considering the combined effect of somewhat greater international sales on somewhat higher profit margins, it is impossible to account for the overall change in corporate profit margins on that basis.

To top all this, they are doing it when corporate profit margins are at an all time high.

This forecast is also supported by evidence from an analysis of corporate profit margins.

Indeed, we could be witnessing a reversal of the sharp rise in corporate profit margins that's occurred over the past dozen years.

Japan's relatively low corporate profit margins mean a given increase in revenues can have an outsized impact on earnings.

I've posted here regularly about the implications of mean reversion in elevated profit margins (see, for example, The Temptation To Abandon Proven Models In Speculative and Fearful Markets: Why This Time Isn't Different, What Record Corporate Profit Margins Imply For Future Profitability and The Stock Market, Warren Buffett, Jeremy Grantham, and John Hussman on Profit, GDP and Competition).

Japan's relatively low corporate profit margins mean a given increase in revenues can have an outsized impact on earnings.

Finally, note that the LFP is also a very important coincident Supercycle Period indicator (like corporate profit margins and industrial capacity): see the up - trending arrow ending in Mar ’00 and the down - trending arrow declining since then.

For example, corporate leverage is approaching record highs, just as corporate profit margins are beginning to stall.

«Business cycles do not succumb to age alone but rather to a confluence of factors like falling corporate profit margins, slowing productivity growth, and a sharp rise in real policy rates into positive territory.»

The wage pop [last Friday's 2.9 % growth in hourly wages] spooked the markets because investors, already skittish as valuations were a bit steep (though not as bad as people have been saying, given strong current and expected corporate earnings), envisioned this sequence: wage growth gooses price growth (i.e., inflation), which raises both market and Federal Reserve interest rates, which slows growth and shaves corporate profit margins.

In contrast, hiring picked up and corporate profit margins improved, suggesting widespread government efforts to reignite growth are unlikely, it said.

Three decades ago, U.S. corporate profit margins were relatively depressed.

With corporate taxes being cut to 21 % from 35 %, corporate profit margins before the tax relief already near record highs, and the window open to tax - efficiently repatriate foreign earnings, one would logically conclude that corporations should be in robust financial health.

Returns on equities are impossible to predict, but the McKinsey researchers point to several factors that have changed since the «golden era,» including lower inflation, lower interest rates, slower economic growth and slimmer corporate profit margins due to greater competition.

Combined with earnings growth, we see these returns of capital to shareholders offsetting some valuation challenges: Investors are typically unwilling to bid up equity valuation multiples when rising interest rates and inflation threaten to erode corporate profit margins.

Today more than ever the question of whether the stock market is overvalued or reasonably valued depends on whether corporate profit margins are abnormally elevated or sustainable.

Some astute investors (such as Hussman and GMO) have argued in essence that the combination of record government deficit spending and unemployment levels has propped up corporate revenues while lowering labor costs, thereby boosting corporate profit margins by as much as 70 percent above historical averages.

Now I am clear why HIGH profits are negative for the economy and why — unless deficit spending, money printing or QE INCREASE — then corporate profit margins will collapse, perhaps violently like in 2008/09 — see chart above.

Increases in expected earnings growth and corporate profit margins outside of Canada has seen the expected returns for both major foreign and emerging market stocks jump, such that investors should be relatively indifferent as to which markets to invest for the best results.

One might object that the best - performing valuation measures mute the effect of variations in corporate profit margins to one extent or another.

Raj Yerasi, a money manager based in New York, has taken on the unenviable task in the following guest post of arguing the case that the increasing influence of foreign earnings on corporate profit margins means that the ratio in the chart overstates future mean reversion in earnings:

Those posts sparked some intense debate in the comments and offline about the increasing influence of foreign profits on corporate profit margins, and how this change may have permanently shifted up the mean for corporate profits as a proportion of GDP.

The result would mean significantly less spending and borrowing and this, in turn, would lead to lower GDP growth, corporate profit margins and employee wages.

Corporate profit margins have been rising for 15 years and are now near their highest levels ever.

On a number of metrics, corporate profit margins have reached multiyear highs and exceeded prior - cycle levels.

Medical suppliers often negotiate fee schedules with insurance companies to keep costs low, but the Affordable Care Act worked to ensure that corporate profit margins would never again get in the way of a woman's access to health care or medical equipment.

The biggest flops included consensus GDP growth, consensus earnings growth, and corporate profit margins.

In this interview Bruce talks about why he doesn't think that corporate profit margins will be reversing to the historical mean.

Corporate profit margins are presently 70 percent above the historical mean going back to 1947, as I've discussed earlier (see, for example, Warren Buffett, Jeremy Grantham, and John Hussman...

Corporate profit margins are presently 70 percent above the historical mean going back to 1947, as I've discussed earlier (see, for example, Warren Buffett, Jeremy Grantham, and John Hussman on Profit, GDP and Competition).

According to GMO's analysis, corporate profit margins are one of the most mean - reverting series in finance, so why would be value markets under the assumption that they will stay high forever?

But corporate profit margins are 70 % above their historical norms, and the deviation is — painfully — well explained by its mirror image: the combined deficit in the government and household sectors (the deficit of one sector must, in equilibrium, emerge as the surplus of another).

The result would mean significantly less spending and borrowing and this, in turn, would lead to lower GDP growth, corporate profit margins and employee wages.

In general, stocks are not cheap, especially if you consider that corporate profit margins are hitting all - time highs.

High corporate profit margins are the showcase of corporate America's might.

Specifically, like that period, valuation multiples are again considerably above historical averages, [3] and they have swelled at the same time that corporate profit margins have expanded toward record highs.

And while underground mines must remove methane to protect workers, there's no reason other than corporate profit margins that it can't be captured and used instead of vented into our atmosphere.