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Small Business Optimism Crashes To 15 Month Lows
With all hopes and dreams of economic renaissance in America pinned on small businesses (see ADP's recent gains), today's data from the NFIB will strike fear in the heart of the wealth-effect-creating Fed. The NFIB small business optimism index disappointed expectations in June (94.1 vs. consensus 98.5), falling to its lowest level since March 2014 - the biggest drop since 2012. All components were weaker but most notably hiring and plans to raise worker compensation tumbled.
As Goldman details,
All components were weaker, with the largest declines seen in earnings trends (-10pt to -17) and plans to increase inventories (-8pt to -4).
The net percent of firms raising worker compensation (-4pt to +21) and planning to raise worker compensation (-3pt to +11) reached their lowest levels so far this year.
Forward-looking capex plans also declined (-2pt to +23) to its lowest level this year. The index has trended lower since reaching its post-recession high last December.
However, it gets worse. As Yahoo reports, American CFO's are worried, according to Deloitte's second quarter 'CFO Signals' survey.
The Chief Financial Officers surveyed by Deloitte are particularly worried about earnings and revenue growth, concerned about cyber security and overall less positive than anytime since the third quarter of 2013.
Three factors are driving the skepticism, according to Sanford Cockrell III, global leader of Deloitte's CFO program and a national managing partner at the firm: concerns about rising interest rates, a potential slowdown in the U.S. economy, and 'macro' worries about the global economy. Notably, the survey was conducted in late May, before the China stock market meltdown and fears of 'Grexit' rattled global markets, albeit briefly.
"It would be interesting if we asked the same questions today around the global economy, [the answers] would shift," Cockrell says, noting CFOs are particularly downbeat on the European economy, with only 5% viewing it as "good" and only 30% expecting it to improve much in the next year.
But the "aha moment" in the survey, according to Cockrell, is the combination of big declines in expectations for earnings and revenue, both to the lowest level in the survey's 5-year history. That, in turn, is leading to what he calls "anemic" hiring expectations and "not great" forecasts for capital spending in the coming year.
CFOs are "quite concerned about growth cycles over the next six months to a year," Cockrell says. Just 38% of CFOs express rising optimism, down sharply from last quarter’s 48% and the lowest seen in more than two years.
In addition, the survey found 65% of CFOs believe the U.S. stock market is "overvalued," up from 46% in the prior quarter.
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Not what escape velocity growth is made of...
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everything is awesome!
This probably isn't going to help today's pathetic volume. Looks worse than yesterday.
You didn't not build that
Hey, I've never heard of this term... can someone please help me out here. Is there a wikipedia page or something? I've never heard of this thing called a "small business"...
Bulli.... I mean green sh..... ahhh fuck it. The economy is completely douche canoed.....
"Douche canoe" is worth an afternoon tequila shooter.....
it's a recovery.. why are you people so Fucking Negative about everything all the time?
"Small business optimism" is now pretty much an oxymoron. "Official government fucking" is the new cool thing......
Being in a small business is like getting old and increasingly watching your friends all die off. The only optimism is that you go in your sleep and do not suffer a long and agonizing death. The only ones I see as optimistic are those who plan on winning big from the collapse...survival equipment and body bags.
What would be really nice is a good stash of antibiotics.
Reality really does suck. No wonder the liars do so well.
I sold out for 2.5x revenue. Best fucking decision I ever made....outside of picking my wife of course. No more bullshit, paper work, excuses. receivable issues.....fucking paradise.
And, by logical extension: forward hiring intentions take a big, fat ass dump too.
As a small business owner, the only path I see towards optimism relies heavily on mind altering drugs. I need to find a delusion support group.
Tyler Durden: Without pain, without sacrifice, we would have nothing. Like the first monkey shot into space.
Instructive: you need to look at whose pain and sacrifice vs whose gain in that example. In other words: sucks to be the monkey.
Monkey, crash test human, take your choice.
What they always say when attempting to mount from behind...
BTFD NEVER GOING DOWN BITCHES!
The United States and Greece share many commonalities. In this instance, a highly contagious disease, commonly contracted through unprotected mental intercourse with ideologues such as Krugman. This particular disease is known as Keynesianism. The disease debilitates the host by corrupting its cerebral cortex and establishing a degenerative addiction. This affliction forces the host to in-debt itself through debt monetization and debt instrumentation. As the disease worsens, a borrowing and spending frenzy occurs in a futile effort which exacerbates the condition. In the terminal phase of the disease, the host attempts to achieve escape velocity by borrowing itself out of debt.
Mojomojo - Its more about kick the can while those at the top survive and thrive. I view the individual solution as two-fold. Sell services to them as that groups blows money frivilously on dreams and use it to hedge into real-estate and some basic needs hedging.
If your not in that position one is better to work as little hours as possible and check out. It is a barbell economy.
We are living in a human zoo.
Job creation has been the worst ever, Statism running wild, the rule of law has been suspended, etc.
Everything is just a shakedown and has been for some time.
I strongly believe that Puerto Rico is just the beginning.
Irony remains "equities still surge on the news." Apparently Wall Street wants everyone dead...
Like the Nazi's we keep doing the same thing over and over hoping for a different result. Centralization is all well and fine till the music stops and people realize how fake this all truly is.
Yep. Have a micro business that used to be small business. 1st half of the year was very slow. Very much like 2012. In a way though I am happy.
It opens up an opp to normalize a market I waited over a decade of financialization to start to draw to close.
When government bribes and monopoly can't sustain growth corporations begin to wonder how to innovate (affiliate and distributorships at first) and some or us are going to show them the way... For a very steep price of course.
Does not matter what small business is doing, this is not about employment or personal wealth, this is about a criminal takeover of US assets by large corporations with the help of the American political establishment. Wake up folks!
Zero Optimism.
Optimism...who gives a shit. I just want some lube...not even asking for a reach around.
As the classic indicators of economic activity grind to a halt so do buy orders in the VIX. Why wouldn't they what with equities making their way slowly but surely to new highs quarter after quarter, year after year.
Pull up a monthly of the SPX and think 'when was a good time to buy em'. All the time is what you will find. Sure Apple (The Market) looks like a short now @125 with the clear breakdown of a large daily topping pattern but no real follow-through yet and what about the day after they report the numbers 7-22-15 when they open it @150 and it goes straight to 250 in the next month?
TheRideNeverends - Yes. It is a melt-up.
Yeah, raise those rates Yellen. I double dog dare ya.