Morning Report: NFIB Small Business Optimism strong

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Last Change
S&P futures 2746 18
Eurostoxx index 364 2.1
Oil (WTI) 58.73 -1.25
10 year government bond yield 3.17%
30 year fixed rate mortgage 4.98%


Stocks are rebounding after yesterday’s sell-off. Bonds and MBS are up small.


Slow news day as bond investors return from a long weekend. Neel Kashkari speaks at 10:00 am EST.


Small Business Optimism continued to hit record levels going back to the early 70s. The NFIB Small Business Optimism Index rose to 107.3 in October. Job creation was strong, with small business adding about .15 workers. 59% of businesses reported spending on expansion, while reports of sales and new orders continued their solid showing. Inflation remains on a slight upward path, while not exhibiting any rapid rises. As commodities fall (oil especially) the big source of inflation remains transportation (driven by labor costs) and anything tariff-related.



Housing affordability dropped again, according to the NAHB / Wells Fargo Housing Opportunity Index. We are back at levels last seen around 2004 and 2009.


Lower affordability means that people are spending on their home improvement projects. The Despot reported earnings that easily topped analyst expectations. I guess when it is hard to move up, people fix up.



26 Responses

  1. Amazon’s announcement about its new Arlington HQ is already sparking dire forecasts about the DC-area’s housing market getting even more unaffordable.


    Liked by 1 person

    • I find it amazing that Amazon chose the most pricey locations outside of San Francisco.

      Liked by 1 person

      • Or Manhattan. . . I suppose Queens is a little more hipster.


      • This astounds me. I just do not get it. But there is clearly something valuable to the already very wealthy bigwigs to saying “I pay 10 times more for everything than I would if we have relocated to Wisconsin!”

        I’m guessing being proximate to DC explains the Virginia choice.


    • And of course:

      “Alexandria Ocasio-Cortez slams Amazon’s imminent arrival in Queens
      “Displacement is not community development.”

      By Matthew Yglesias
      Nov 13, 2018, 10:10am EST”

      Liked by 1 person

      • The left is going to complain no matter what.

        Liked by 1 person

      • It’s their own damn fault. Should have picked Texas. And Fort Worth, not Austin. 😉


        • Agreed. DFW area is nearly perfect for this sort of thing. One could argue for Madison or Raleigh-Durham or Austin based on highly trained employee pool and reasonable cost of living, but DFW would have been a very strong choice. The COL in DC and NYC is awful, like coastal Cali, or Seattle. Some lower cost areas like KC probably don’t quite have the ready supply of tecchies.

          Came down to Bezos having residences in NYC and DC?

          Liked by 1 person

        • And I think DC having heavy regulatory power of his business (and tech business in general) probably played a role. I suspect Amazon wants to be closer to DC in important ways, so that they aren’t some distant bogeyman that DC politicians feel comfortable in vilifying (or head-taxing at the national level) because they have little interaction with the people of Amazon. Easier to set up a meeting in DC when you’ve got office right there. Or entertain some politicians in your office. Show them the cool stuff you’re doing.

          I get the DC move. Makes sense. NYC does make sense for media influence, now that jcn4p says it.


        • Or wants political/media influence and those would be the places to locate for that.

          His biggest business threat right now is probably an antitrust action by a government entity.

          Liked by 1 person

  2. Does anyone trust the recounts going on right now?


    • Does anyone trust the recounts going on right now?

      I have participated in two recounts in county wide elections and this is what I can tell you: the recount officials come from both parties and do their best; if there are more than 30K votes it seems a sure thing that the recount will change by 100 votes or more, and if you keep recounting you keep getting different results no matter how careful you are because all the people counting are freaking humans. A CPA once said to me they should keep recounting until they get the same total twice in a row.

      My guess is that if the vote total difference is under a fifth of one per cent there is no way in hell you can ever know who won.

      But the first recount is in most places mandatory if the difference is under a small margin, like 1/2%. So nobody is trying to pull a fast one unless it’s the guys who are complaining about having a mandatory recount.

      In short, I trust the recounters but their results may not be any more or less accurate than the original count by reason of CHANCE.

      Liked by 1 person

    • What I’ve heard about Florida (unsurprisingly) sounds like transparent conspiracy to commit voter fraud. But that’s Florida. Any time where recounts suddenly produce a lot of extra votes from nowhere, it seems suspicious to me. I expect smaller level, less-contentious elections in the modern era are largely fraud free, but all of these sound quasi-fraudulent.

      But like gerrymandering and “voter suppression”, all tools of voter manipulation, the only reason its an issue is neither candidate was strong enough to win a clear majority of their voters. I put it in the same category as the Trump or Dubya victories, where they lost the popular vote but won the electoral vote. If Gore or HRC had been good enough to win a clear majority, the “unfairness” of the electoral college would never have been an issue.

      I expect most actual voter fraud only happens after very close elections, and it often is outright fraud. But it would make no difference if the candidates themselves were strong enough to win a clear majority . . . and we’re talking about an extra 1%-3% of the votes there. Or just better at getting their voters out.


      • I don’t trust the FLA Democrats further than I can throw them. Broward County is just the sixth borough of NYC…


        • Brent, I think you and Kevin are not complaining about a RECOUNT. You are complaining about an initial count. Broward,for reasons that may indeed be suspect, has not finished its initial count. At least that is what I understand.

          Recounts are court supervised and bipartisan.


        • Following up on recounts:

          In key counties Friday, manual recounts were finished with startling speed. Broward, which had stumbled through the machine recount, rolled through the state-mandated hand recount in just two hours Friday morning with only minimal arguments from party lawyers and no major controversies. The recount was completed so quickly that workers were sent home before lunch.

          Court ordered, bipartisan, and not crooked. Recounts – better supervised than initial counts.

          It is not fantastic to suppose that Broward has more iffy ballots than other places because the average voter there is ten years older than I am.


    • Why not?


  3. John Yoo’s piece arguing Trump’s acting AG appointment is unconstitutional.


    • I liked Yoo’s piece. I did not go back and read his citations so have no personal opinion about the validity, but I doubt Yoo fudged. Too easily verified, or not.

      Liked by 1 person

    • The argument seems solid, and there doesn’t seem to be a precedent for what Trump has done here (not really) so I’m prone to agree with Yoo.

      That being said, I disagree with the demands for recusal. 1: he shouldn’t have been appointed without the advice and consent of the senate, so recusal from anything should not be an issue. 2: I’ve never believed people should have to recuse themselves for having an opinion, or having expressed a position on something, without there being a (typically financial) conflict of interest or direct involvement in some way of the person recusing themselves.

      The White House may have thought it had cleverly figured out a way to curtail the investigation by appointing Whitaker, but it has instead virtually assured that Mueller will complete his job in his own good time.

      I tend to wonder of Whitaker is actually there not to fire Mueller, which seems like it would be a futile exercise, than to clean house at the DoJ under cover of darkness and get rid of a lot of “deep state” bureaucrats. I’m dubious that anyone seriously thinks Trump has a lot of options regarding Mueller, other than letting it all play out. I tend to suspect this may actually be a drain the swamp type of exercise, one that Sessions clearly was not going to execute.


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