Releases Video on Margin Pressure

By Saxo Bank, PRNE
Tuesday, May 17, 2011

LONDON, May 18, 2011 -, the home of Saxo Bank's trading commentary, financial
research and analysis, has released a video discussing the first quarter
earnings wrap and specifically what happened to margin pressure.

It seems margin pressure hardly emerged and that its effects (on the back
of higher commodities), especially for consumer driven companies, will
instead first kick in later in the year. The underlying momentum for stocks
remains strong. Pro-cyclical companies, in particular, posted good results
largely driven by emerging markets), and this was confirmed in their earnings
outlooks for more growth ahead - which is good news for stocks and the
overall economy. Peter Garny, equity strategist for Saxo Bank discusses these
issues in's latest video.

With the larger companies in the S&P 500 in mind Peter discusses how many
investors at the beginning of the earnings season were talking about a margin
squeeze. In actual fact margins have actually expanded slightly in April, as
well as year on year. So, margin pressure is by and large not evident yet,
and the only disappointment lay on the top line in terms of revenue, which
has slowed down somewhat. However, Peter is hopeful that this will grow again
as the economy continues to grow throughout the year.

Peter then tackles how companies have dealt with the pressure of rising
input costs. He commented that many of the large companies still have tight
controls in place, meaning they have managed to keep their operating costs
low. Most companies are also operating with long term contracts, which mean
that rising spot prices in commodities are yet to kick in.

To finish, Peter talks about how large shipping companies and steel
makers have recently reported better than expected earnings and growth, and
what can be deduced from this in terms of economic growth. The numbers from
these big procyclical companies, combined with the better than expected GDP
numbers from the Eurozone show that the underlying momentum in the economy
and on the corporate side is strong. However, as there is no great pick up in
either Europe or the U.S., the emerging markets are clearly driving these
numbers. This is a good sign for economic recovery, because when big
companies affirm their outlooks for 2011, it generally means it should be a
good year for stocks.

Peter points out that the average expansion period in an economy is
around 24 quarters, and that the current expansion period is only seven
quarters in. He therefore predicts that a lot of the worries and concerns are
premature and that 2011 should continue to be a good year.

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    PR contact:
    Kasper Elbjorn
    Head of Group Public Relations
    Saxo Bank
    40 Bank Street
    Canary Wharf
    E14 5DA
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