February/March 2019 - Bubbles and Bottoms for Companies -

It seems like businesses are having the same kind of mindset as consumers: positive today, but very wary about the future.
Commercial and industrial loans are still rising, month after month, since 2011.

But some cracks are starting to show in the profit margins and the earnings outlook. Profit margins seem to have peaked in the third quarter of 2018, with no immediate return to this peak in sight. This is also very nicely visualised over the long term, supported by clear one-liners that indicate the reason for these levels of earnings.  One can say that the peak in earnings in Q3 last year was because of the one-time tax cuts, and are now fully baked in.

Meanwhile, small businesses are becoming downright negative about the future, with the largest 2 months decline on record when it comes to answering the question: “is it a good time to expand”.

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