NFIB Small-Business Optimism Index Drops in September

At last, our speculations about economic growth in Q3 can be put to rest — new earnings numbers are beginning to hit the tape this morning from some of the biggest banks on Wall Street. We also get a new NFIB Small-Business Optimism Index for September. Who needs the federal government for economic data?

Pre-market futures are down at this hour, as the market continues to work toward some equilibrium amid plenty of near-term challenges: the government shutdown, the AI trade growing exponentially (with people now daring to utter the “b” [for “bubble”] word) and uncertainty regarding establishing new trade deals with China. Indexes have been volatile, and we may expect this to continue: the Dow is -0.86% at this hour, the S&P 500 -1.02%, the Nasdaq -1.29% and the small-cap Russell 2000 -1.34%.

Small Business Optimism Drops in September

The National Federation of Independent Business (NFIB) released its Small-Business Optimism Index for September this morning, with the headline coming in negative for the first time in three months: -2.0 month over month to 98.8. This is still above the survey average of 98, although the Uncertainty Index shot up +7 points to an even 100 — the fourth-highest reading in the 52-year average of the index.

Supply Chain concerns, up +10 points month over month, topped the list, followed by Inflation. A seasonally adjusted +31% of small businesses plan to raise prices in the next three months. And +32% of jobs have gone unfilled in September, unchanged from the August figure. This is not considered a major economic print, but it does provide more points on the graph adding up to a more-insecure economy at present.

Big Banks Report Q3 Earnings & More

JPMorgan Chase JPM, which flipped from a Zacks Rank #3 (Hold) to a Zacks Rank #2 (Buy), outperformed expectations on both top and bottom lines in its Q3 report this morning. Earnings of $5.07 per share surpassed the $4.83 in the Zacks consensus by +5%. Revenues of $46.43 billion topped estimates by +3.5%. Shares are selling -1% on the news, but the stock is +28% year to date. 

Citigroup C shares are up +1% in early trading on its Q3 report out ahead of the bell: earnings of $1.86 per share missed the Zacks consensus by 5 cents, while revenues of $22.09 billion came out ahead of the projected $21.13 billion for the quarter. Banking revenues surged +34% in the quarter, and the stock continues its strong run, +36% year to date. 

Wells Fargo WFC outpaced expectations for both earnings and sales today: $1.73 per share easily bettered the $1.55 analysts were expecting for a +11.6% positive surprise, on revenues of $21.44 billion — +1.15% higher than estimated, and a solid increase over the $20.37 billion in the year-ago quarter. Shares are up over +3% in the pre-market, adding to its +12% earned year to date. 

Goldman Sachs GS posted another quarter with headline beats on top and bottom lines. Earnings of $12.25 per share came in well ahead of the $11.11 expected for Q3, on $15.8 billion in quarterly revenues which well-outpaced the $14.14 billion in the Zacks consensus. Yet less-than-wholly-impressive results from Equities Trading (not enough AI?) are helping shares lower -2.4% at this hour, helping bring down the Dow 30.

It’s not just big banks reporting today. Johnson & Johnson JNJ beat earnings estimates by 3 cents to $2.80 per share for its Q3, with revenues of $23.99 billion coming in ahead of expectations by +1.03%. Shares are up marginally on the news, but still adding to the impressive +32% growth for the Consumer Staple mainstay year to date. 

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