A Brief NASDAQ Correction, Optimism from Small Businesses and Increasing Mortgage Applications

Three Days of Selling and One Jump

The end of August meant five consecutive positive months for U.S. stock markets. Obviously that’s good news, but it caused investors to worry about September since it’s historically been the worst month for the market. Early on, September was – and maybe still is – on track to still be worst month for trading.

There isn’t cause for alarm, yet, but at the close of trading on September 9th, we saw a 3-day tech sell-off and a one-day tech jump that has resulted in:

  • On September 9th, NASDAQ had its top day since April as it leapt 2.7%
  • The DJIA, NASDAQ and the S&P 500 closing in the red on for three straight days and then jumping on the 4th day (September 9th)
  • NASDAQ moving into correction territory for a very brief moment when it was down 10% from its record high as of September 8th 

As always, this needs to be put in perspective since the market reached a one-year-low on March 23rd. Since then, the NASDAQ is up over 65%.

Things are Looking Up for Small Businesses 

The National Federation of Independent Business collects data from small and independent businesses and publishes their Small Business Economic Trends data on the second Tuesday of each month. The NFIB was founded in 1943 and is the largest small business association in the U.S. Their Index is a composite of 10 components based on expectations for employment, capital outlays, inventories, the economy, sales, inventory, job openings, credit, growth and earnings.

The Small Business Economic Trends data released on September 8th reported:

“The NFIB Optimism Index increased 1.4 points in August to 100.2, a reading slightly above the historical 46-year average. Seven of the 10 Index components improved, two declined, and one was unchanged.”

The NFIB also reported that:

  • Job openings increased three points to 33% of firms with at least one unfilled position.
  • Earnings trends over the past three months improved seven points to a net negative 25% reporting higher earnings.
  • Real sales expectations in the next three months decreased two points to a net 3%.
  • The percent of owners thinking it’s a good time to expand increased one point to 12%.

MBA Mortgage Applications are Up

The Mortgage Bankers’ Association collects various mortgage loan indices. The Market Composite Index measures the volume of applications at mortgage lenders. 

On September 9th it was reported that:

  • The seasonally adjusted Purchase Index increased 3% from last week and the unadjusted Purchase Index was up 0.2% from last week but up a whopping 40% from the same week one year ago.
  • The Market Composite Index increased 2.9% on a seasonally-adjusted basis from the previous week (it was 2% on an unadjusted basis).
  • The Refinance Index increased 3% from the previous week and was 60% higher than the same week one year ago. 

Sources: nfib.com; mba.org


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