Tuesday, September 13, 2011

NFIB Small Business Index is out this morning.
Considering that small businesses are the engine for job creation, while big corporations are able to increase productivity/automation, thus actually shedding jobs over the long run... things doesn't look too good. In fact, the 'Outlook for Business Conditions' made a new low, worse than 2008-2009 and 'Expectations for Higher Sales' dipped further to meet 2H08's levels. And that's without any large banks going world wide. I guess the small-biz managers also know something the overall rosy sell-side doesn't, right?

Below charts for the overall index (Optimism Index), Outlook for Business Conditions and Expectations of Higher Sales.

Then a chart with some other components that confuse me: if conditions for doing business are expected worse, if sales are expected to be also worse.. how can hiring plans be moving upward? I'm not the one to judge. I'm here to interpret.

*Disclaimer: charts and data are presented as I receive/see them. Sources are usually not checked for validation and my own calculations are of 'back of the envelope'-type. I am aware that some math that I do myself might be wrong and/or misleading to some extent. In financial markets the rate of change of economic data is often more important than the actual level and the perception of 'what is priced in' is more important than 'what is actually going to happen'. This is actually the way people pick entry and exit points. So... yes, sometimes you might say 'This guy is an idiot, this is way wrong!' with a high conviction, being right. Not to worry. Markets are made of expectations and the clash of conviction between its participants. Portfolio managers know that being an idiot is sometimes profitable and being smart is often a bad choice. It is all reality, sometimes good, sometimes bad. By the way: corrections to my analysis and intelligent debate is welcome. theintriguedtrader AT gmail do com

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