Projected Corporate Margin Expectations Dip To 7 Month Lows

Tyler Durden's picture

Buried in the Empire Fed manufacturing data is the forward expectations for Prices Paid and Prices Received. Taken together, somewhat obviously, they reflect businesses views of their margin expectations for the future. For seven of the last nine years, this future margin expectation has risen from mid-year into the end of the year (whether hope-driven or real fundamentals is unclear), but this year, the picture is very different. For the first time since 2007, future margin expectations have plunged into year-end as expectations for prices-paid have notably risen relative to expectations for prices received. Though the sample is small, the last time we saw such a huge divergence from the seasonal tendency for margin expectations was followed by an equity market reaction many would prefer not to remember.


The lower pane shows the implied margin expectations from the Empire Fed survey. Notice the pattern into year-end...


which is highlighted more specifically here - the blue line is the 10 year average seasonal tendency for the margin expectation (a fall into mid-year and rise into year-end). This year saw the same pattern into mid-year and then a collapse from June to November (Red line)... quite notably different.


Charts: Bloomberg

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
evolutionx's picture

New Details About Sandy Hook Shooting Suspect Adam Lanza. The mother of the gunman who killed 20 children and seven adults in America’s worst school massacre, was a gun-proud “survivalist” preparing for economic collapse, it has emerged.

otto skorzeny's picture

I see preparing for the worst now makes one some type of marginalized kook. it used to be that was considered prudent

Zer0head's picture

Congratulations to this hours winner of the California Lottery where every public employee is a Winner

California Highway partrol divisional chief Jeff retired last year as the best-paid officer in the 12 most-populous U.S. states, collecting $483,581 in salary, pension and other compensation.

Talbott, 53, received $280,259 for accrued leave and vacation time and took a new job running the public-safety department at a private university in Southern California. He also began collecting an annual pension of $174,888 from the state.

SmoothCoolSmoke's picture

Why can't this guy get paid for unused vacation?  Happens everyday in Corporate Ameriika.

Zer0head's picture

paid for unused vacation in corporate Amerika? maybe at JPM but not at the Walmart in bumfuck arKansas

EnslavethechildrenforBen's picture

Let me guess, he thought Bankers were evil and should all be hung...

GMadScientist's picture

The word is 'hanged', let's not reach for the stars okay?


francis_sawyer's picture

Difficult for a banker to be 'hung' when, by & by, they're categorically a bunch of pussies...

Sockeye's picture

Let this be a warning to all you prudent people out there. Being prudent will turn your children into monsters. Do not rely on yourself, depend on the government to provide. Start by swallowing this psychotropic medication.

GMadScientist's picture

It's Connecticut...they're all hastening the economic collapse in one way or another.


hugovanderbubble's picture

EBIT/Sales 2013 dropping like Stones

jeff314's picture

no need for margin with QEEEEEEEEE

otto skorzeny's picture

they'll make it up on volume/sarc

hugovanderbubble's picture

Baltic Dry Index should have to be halted...7XX lol , well who cares about it... Is a beautiful deflationary feeling xd:)

otto skorzeny's picture

can that be traded or is it simply what it says-an index?

GMadScientist's picture

Not easily; better to target a few specific shipping companies (for shorts, obviously).

Debeachesand Jerseyshores's picture

Corporations will have their "balls to the wall" sooner rather than later.

GMadScientist's picture

And by "corporations", you mean the captive audience of 401k holders across the US.

SmoothCoolSmoke's picture

Obama got the upper hand on the NRA.  Sorry....but he does. 

LawsofPhysics's picture

Yes, and I am sure that the coming "war on guns" will be just as successful as the "war on drugs" or "war on terror."  - FAIL

prains's picture

Are you sure this chart is not for corporate welfare expectations


SheepDog-One's picture

Oh...nothing but bad news and fiscal cliff 2 weeks, but I guess all is well with Bernank Clownbux at least!

orangegeek's picture

Corporate earnings turning down.  The Q2 and Q3 strategies to fire employees to show greater profit because revenues suck looks like it's going to end.


SP500 should tank nicely in January.

q99x2's picture

I want a Bernanke printer for Christmas.

NEOSERF's picture

Profit, shmoffit...ability to float more bonds to pay overhead is the key.   The Bernank shows us the way...