The State of Small Business, Employment Recovery Lags Previous Recessions, and a Look at Earnings Guidance
September 30, 2020 | FIRESIDE CHARTS
Economic reopenings are rolling on—NYC welcomes back indoor dining today—but small businesses are still struggling. 43% of those surveyed reported seeing revenue more than halved since the onset of the pandemic, and it’s being reflected in their employment numbers… which are very reminiscent of 2009. But how does the broader employment recovery stack up against previous recessions? Meanwhile, S&P 500® Index companies look to be feeling optimistic on the earnings front as we close out Q3, and October and November have historically been strong months for the index. With political tensions ratcheting ever-higher ahead of the election, will the trend continue?
1. Small businesses continue to struggle versus their larger peers. This is concerning as small business is a main economic engine in the U.S….
Source: The Daily Shot, from 9/30/20
2. Small business employment is down because revenues are down:
Source: The Daily Shot, from 9/30/20
3. Some sobering perspective…
Source: The Daily Shot, from 9/29/20
4. Despite a large Covid outbreak in Texas, the regional Fed survey shows continued improvement in manufacturing.
Source: The Daily Shot, from 9/29/20
5. With September behind us, will this year’s political roiling spoil the historic trend?
Source: Goldman Sacs, from 9/30/20
6. Some good news from the S&P 500 earnings guidance…
Source: The Daily Shot, from 9/30/20
7. Return expectations are going to need some readjustment…or much more risk will be needed to try to keep up with past return expectations…
Source: The Daily Shot, from 9/29/20
8. Japan has yet to get a severe Covid outbreak, but their economy—largely dependent on exports—still has a long way to go to a full recovery…
Source: The Daily Shot, from 9/30/20
9. While the surveys are slightly different, unlike Japan, China’s manufacturing is fully recovered…
Source: IHS Markit, from 9/30/20
10. Are the Chinese stock markets poised for a downdraft or will a short squeeze give them a boost
Source: The Daily Shot, from 9/29/20
11. Looong-term perspective…
Source: Deutsche Bank research, from 9/29/20
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