MARGIN MOVEMENT

Pre-Covid, next twelve-month operating margins for fortune 500 firms on an equal weighted basis (thus largely excluding tech mega-caps), were 13%. When Covid hit they quickly collapsed to 9% by 6/20. However, over the ensuing 12 months they more than recovered and peaked at 14.5% in mid-2022. From then through mid-2023 they fell to 13.25% where they have remained since. Pricing power of most firms has largely disappeared.