Business confidence surged in May despite renewed uncertainty in the U.S.-China trade dispute. As shown in the LPL Chart of the Day, “Business Optimism Surges Despite Trade Uncertainty,” the National Federation of Independent Business (NFIB) Small Business Optimism gauge climbed to a seven-month high in May.
The number of companies that made capital outlays rose to a 15-month high, while those with plans to increase capital expenditures (
“Upbeat sentiment in May was a positive surprise in an otherwise missed month for economic data,” said LPL Chief Investment Strategist John Lynch. “Signs of a pickup in
Small business sentiment also improved in the Federal Reserve’s latest Beige Book, according to our propriety Beige Book Barometer (BBB). The BBB rose to 44 in the latest edition (released June 5 and
Consumer confidence also surged in May, as the Conference Board’s Consumer Confidence Index rose to a six-month high. However, the cutoff date for Conference Board’s survey was May 16, so the data likely didn’t capture much of the fallout after the latest flare-up in U.S.-China trade tensions. We’ll get more details on consumer activity in the May retail sales report, which is scheduled to be released June 14.
We aren’t convinced that sentiment has fully recovered. Confidence has been especially susceptible to developments in trade talks, and economic susceptible to developments in trade talks, and economic data have been especially volatile this year. We’ll continue to watch economic data for evidence of higher sentiment and activity.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. The economic forecasts set forth in this material may not develop as predicted.
All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. All performance referenced is historical and is no guarantee of future results.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
This Research material was prepared by LPL Financial, LLC.
Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC).
Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL is not an affiliate of and makes no representation with respect to such entity.
If your advisor is located at a bank or credit union, please note that the bank/credit union is not registered as a broker-dealer or investment advisor. Registered representatives of LPL may also be employees of the bank/credit union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, the bank/credit union. Securities and insurance offered through LPL or its affiliates are:
|Not FDIC or NCUA/NCUSIF Insured | No Bank or Credit Union Guarantee | May Lose Value | Not Guaranteed by Any Government Agency | Not a Bank/Credit Union Deposit|
For Public Use | Tracking # 1-862668 (Exp. 06/21)