S&P 500 Sales and Earnings

Here’s a look at the sales and earnings for the S&P 500. The sales (red line) follows the left scale and the earnings (blue) follow the right. The two lines are scaled at a ratio of 10-to-1, so whenever the lines meet, the S&P 500’s profit margin is exactly 10%.

What’s interesting to note is how more pronounced the slide in earnings is compared to the drop in sales. A lot of this is due to the train wreck in the energy sector.

You can also see how the economic recovery was driven by an expansion of profit margins. That seems to have come to an end.

Posted by Eddy Elfenbein on May 17th, 2016 at 1:27 pm

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