Margin & Leverage Cycle

How S&P 500 profit margins and balance-sheet leverage have moved through the recent Fed hiking and cutting cycle: sector trends, a company-level margin-vs-leverage scatter, and a test of whether hiking regimes coincide with margin compression or rising leverage.
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Companies Loaded
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Of full S&P 500
Median Operating Margin
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Latest quarter, market-wide
Median Net Debt / EBITDA
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Latest quarter, market-wide
Current Fed Regime
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Avg. quarterly margin change, this regime

Sector margins over time

Median quarterly margin across each SPDR sector's S&P 500 constituents

Sector leverage over time

Median net debt / trailing-twelve-month EBITDA by sector. Higher means more balance-sheet leverage relative to cash earnings.

Margin change by Fed regime

Median quarter-over-quarter operating margin change (ppt), grouped by that quarter's Fed-funds regime

Leverage change by Fed regime

Median quarter-over-quarter net-debt/EBITDA change (turns), grouped by regime

Margin change vs. change in Fed funds rate

Each point is one calendar quarter: x is the trailing 3-month change in the effective Fed funds rate, y is that quarter's median operating-margin change

Leverage change vs. change in Fed funds rate

Same construction, for the median net-debt/EBITDA change that quarter

Margin vs. leverage, most recent quarter

Every company with both figures available. Is thinner margin associated with more leverage right now?

Widest sector-relative margins

Operating margin furthest above its own sector's median
SymbolSectorMarginvs. Sector
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Thinnest sector-relative margins

Operating margin furthest below its own sector's median
SymbolSectorMarginvs. Sector
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Most levered vs. sector

Net debt/EBITDA furthest above its own sector's median
SymbolSectorNet Debt/EBITDAvs. Sector
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Least levered vs. sector

Net debt/EBITDA furthest below its own sector's median
SymbolSectorNet Debt/EBITDAvs. Sector
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Methodology

Data. The universe is the S&P 500. For each company, Alpha Vantage's quarterly INCOME_STATEMENT and BALANCE_SHEET data are joined on fiscal quarter-end date. Gross, operating and net margin are gross profit, operating income and net income divided by total revenue for the quarter. Leverage is net debt (total debt, using Alpha Vantage's combined shortLongTermDebtTotal field where available, minus cash & equivalents) divided by trailing-twelve-month EBITDA. EBITDA uses Alpha Vantage's ebitda field where populated, otherwise operating income plus depreciation & amortization. Some tickers return the string "None" for a field. Those values are treated as missing, and the company-quarter is dropped from that metric.

Sector series. Each is the median across a SPDR sector's constituents for a calendar quarter. A fiscal quarter-end is placed in the calendar quarter its month falls in, so a company with a non-calendar fiscal year (a January quarter-end, for example) can land one quarter off its own numbering. That doesn't affect a sector median. A sector-quarter median is published only once at least 3 companies report.

Regime test. Each calendar quarter is classified as Hiking, Holding or Cutting using the same thresholds as Small Cap vs. Large Cap Spread: a trailing-3-month change in the effective Fed funds rate above 0.1pp is hiking, below -0.1pp is cutting, otherwise holding. The test uses one point per calendar quarter, not each company's quarterly change (~500 overlapping points per quarter would overstate significance). That point is the cross-company median change in operating margin, and separately in net-debt/EBITDA, regressed against that quarter's Fed funds change (Pearson and Spearman, as on Factor Analysis). With a few dozen quarters, and margins and leverage that move slowly, this is a small-sample test. A weak or insignificant result is still a result.

Leaderboards and the per-company table compare each company to its own sector's latest median, since margin and leverage norms vary a lot by industry (software vs. retail, utilities vs. banks). A company can show the widest margin on the page and still look ordinary next to its sector peers.

Refreshes weekly (Saturday morning), since fundamentals only change when a company files a new 10-Q or 10-K. Sector and company name come from Sector Beeswarm.