A Brief NASDAQ Correction, Optimism from Small Businesses and Increasing Mortgage Applications
Three Days of Selling and One Jump
The end of August marked five consecutive positive months for U.S. stock markets. While that’s good news, it also raised concerns among investors, as September has historically been the worst month for the market.
Early on, September was—and may still be—on track to be the worst month for trading. There isn’t cause for alarm yet, but at the close of trading on September 9th, we saw a three-day tech sell-off followed by a one-day tech jump, resulting in:
On September 9th, NASDAQ saw its best day since April, jumping 2.7%
The DJIA, NASDAQ, and S&P 500 closed in the red for three straight days before rebounding on the fourth day (September 9th).
NASDAQ briefly entered correction territory, dropping 10% from its record high on September 8th.
To put this in perspective, the market hit a one-year low on March 23rd.
Since then, the NASDAQ has surged over 65%.
Things are Looking Up for Small Businesses
The National Federation of Independent Business (NFIB) gathers and publishes 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 factors, including employment expectations, capital outlays, inventory levels, economic outlook, sales, job openings, credit availability, business 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, slightly above the historical 46-year average. Seven of the 10 Index components improved, two declined, and one remained 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 rose 3% from last week, while the unadjusted Purchase Index edged up 0.2% but was 40% higher than the same week one year ago.
The Market Composite Index rose 2.9% on a seasonally adjusted basis from the previous week (2% on an unadjusted basis).
The Refinance Index climbed 3% from the previous week and was up 60% year-over-year.