US PPI-CPI gap at 2.6 percentage points... S&P 500 profit margin estimated at 14.9%

US final-demand producer prices rose 1.3% month-over-month and 6.3% year-over-year in September, outpacing the 0.6% monthly and 3.7% annual gains in consumer prices reported a day earlier, leaving a 2.6-percentage-point gap between the two gauges. Upstream cost pressures were sharper still, with processed intermediate goods up 14.1% and unprocessed intermediate goods up 21.5% year-over-year, while final-demand energy prices jumped 10.8% on the month. The spread matters because it frames the margin outlook for S&P 500 companies, whose third-quarter net margin is estimated at 14.9%. The article cautions that the PPI-CPI gap alone cannot confirm a margin decline, so the next things to watch are whether those upstream costs feed through to consumer prices or compress corporate profitability.