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

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Mon, 12/17/2012 - 10:51 | 3070999 evolutionx
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.

Mon, 12/17/2012 - 10:55 | 3071007 otto skorzeny
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

Mon, 12/17/2012 - 10:57 | 3071020 Zer0head
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.

Mon, 12/17/2012 - 11:18 | 3071061 SmoothCoolSmoke
SmoothCoolSmoke's picture

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

Mon, 12/17/2012 - 12:55 | 3071323 Zer0head
Zer0head's picture

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

Mon, 12/17/2012 - 10:58 | 3071023 Enslavethechild...
EnslavethechildrenforBen's picture

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

Mon, 12/17/2012 - 11:05 | 3071037 GMadScientist
GMadScientist's picture

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


Mon, 12/17/2012 - 11:11 | 3071046 francis_sawyer
francis_sawyer's picture

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

Mon, 12/17/2012 - 11:18 | 3071062 Sockeye
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.

Mon, 12/17/2012 - 10:55 | 3071016 GMadScientist
GMadScientist's picture

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


Mon, 12/17/2012 - 10:52 | 3071005 hugovanderbubble
hugovanderbubble's picture

EBIT/Sales 2013 dropping like Stones

Mon, 12/17/2012 - 10:52 | 3071006 jeff314
jeff314's picture

no need for margin with QEEEEEEEEE

Mon, 12/17/2012 - 10:54 | 3071010 otto skorzeny
otto skorzeny's picture

they'll make it up on volume/sarc

Mon, 12/17/2012 - 10:53 | 3071011 hugovanderbubble
hugovanderbubble's picture

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

Mon, 12/17/2012 - 11:00 | 3071029 otto skorzeny
otto skorzeny's picture

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

Mon, 12/17/2012 - 11:13 | 3071050 GMadScientist
GMadScientist's picture

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

Mon, 12/17/2012 - 11:07 | 3071040 Debeachesand Je...
Debeachesand Jerseyshores's picture

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

Mon, 12/17/2012 - 11:24 | 3071084 GMadScientist
GMadScientist's picture

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

Mon, 12/17/2012 - 11:15 | 3071053 SmoothCoolSmoke
SmoothCoolSmoke's picture

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

Mon, 12/17/2012 - 11:52 | 3071154 LawsofPhysics
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

Mon, 12/17/2012 - 11:15 | 3071056 prains
prains's picture

Are you sure this chart is not for corporate welfare expectations


Mon, 12/17/2012 - 11:36 | 3071118 SheepDog-One
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!

Mon, 12/17/2012 - 12:16 | 3071211 orangegeek
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.

Mon, 12/17/2012 - 12:44 | 3071287 q99x2
q99x2's picture

I want a Bernanke printer for Christmas.

Mon, 12/17/2012 - 13:48 | 3071464 NEOSERF
NEOSERF's picture

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

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