Latest / Markets with Megan: A Quick Financial Markets Update / Small Business Optimism Falls: What Lies Ahead for the Economy? | Episode 170 | 09-10-24

Transcript

Small Business Optimism Falls: What Lies Ahead for the Economy? | Episode 170 | 09-10-24 · Markets with Megan: A Quick Financial Markets Update

• 0:01
  Megan Horneman: Well, it's called the Small Business Optimism Index, although what we saw this month is small businesses are not optimistic whatsoever.
• 0:08
  Megan Horneman: It is Tuesday, september 10th, and we got the report for August this morning and there's really not a whole lot of positive that I can find in this report.
• 0:16
  Megan Horneman: Let's dig into the details, because it breaks it down into a lot of different areas of small businesses and their opinions on the economy, on businesses, on earnings trend.
• 0:26
  Megan Horneman: First of all, the index itself.
• 0:28
  Megan Horneman: It did drop for the first time in five months Remember we had gotten a little bit of stabilization in this but it did drop for the first time in five months and it was the biggest monthly drop we've actually seen since June of 2022.
• 0:41
  Megan Horneman: One of the other components in this report is the uncertainty index so how uncertain are businesses about the future and that actually reached the highest level that we've seen since 2020.
• 0:54
  Megan Horneman: So, again, businesses are very concerned about what's going on from an economic standpoint, and some of this report may be election jitters.
• 1:02
  Megan Horneman: Let's just keep that in mind.
• 1:04
  Megan Horneman: We are getting close to the election.
• 1:06
  Megan Horneman: We're starting to get some of the policies from both parties.
• 1:09
  Megan Horneman: There may be some concerns and when we see this, we do tend to see small businesses pull back on not only hiring but also spending, and we saw that.
• 1:18
  Megan Horneman: We saw of the areas that declined those planning to increase inventory, those expecting a better economy, those expecting higher sales, the ease of credit conditions that still is weak.
• 1:31
  Megan Horneman: And then those expecting a positive earnings trend.
• 1:35
  Megan Horneman: So remember, earnings have been relatively good this year and it's been supporting the equity markets, but those expecting a positive earnings trend actually fell to the lowest level we've seen since March of 2010.
• 1:48
  Megan Horneman: So, again, not a great report for the economy.
• 1:52
  Megan Horneman: The Fed's looking at this.
• 1:53
  Megan Horneman: We're still not thinking it's going to make any change to what they do.
• 1:56
  Megan Horneman: In September they're probably going to come in with a 25 basis point rate cut.
• 2:00
  Megan Horneman: Tomorrow we will get the CPI report and this will be important because if there's any big miss either way, this can either confuse market participants or it can solidify maybe the 25 or the 50 basis points at the upcoming meeting.
• 2:15
  Megan Horneman: That's all that we have today.
• 2:17
  Megan Horneman: If you like this podcast, please feel free to hit the subscribe button, hit that alarm bell.
• 2:23
  Megan Horneman: And if you'd like to see more podcasts the history of our podcasts please feel free to go to marketswithmegan.
• 2:28
  Megan Horneman: fm.
• 2:30
  Megan Horneman: Thank you.