Small Business Owners Optimistic

Market Overview
Read time 0.8 minutes

Year To Date Performances:

1. Optimism about the US economy has been increasing among small business owners each month since May. Interestingly, inflation has lost its position as the most pressing concern among small businesses, supplanted by labour quality. Additionally, the proportion of companies intending to increase prices has fallen to its lowest since January 2021. Despite the persistently negative business outlook in the media, expectations amongst small business owners have climbed to their highest since August 2021.

2. The prevailing sentiment among investors leans towards holding a higher proportion of equities in their portfolios. Regarding their investment exposure levels, the collective position in equities slightly decreased last week, settling around the 70th percentile. Among different types of investors, those following discretionary strategies were the most active, positioning themselves at the 68th percentile. Conversely, systematic strategies remained largely unchanged, staying in the 74th percentile. Volatility-control and CTA exposure positions were noted at the 59th and 85th percentiles, respectively. On the other hand, mutual funds and hedge funds continue to display a lesser inclination toward equities. Mutual funds have a below-average beta to the S&P 500, while hedge funds, as indicated in the graph, are signalling a marked bearishness toward stocks.

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4. Headlines

   1. The US Energy Information Administration is now estimating Brent crude oil will average $86/barrel in H2 2023, up from their estimate of $79/barrel in July.

   2. UPS profits and revenues were down as the company missed revenue expectations but slightly beat its earnings per share forecasts.

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