Small business tell us a lot about the direction of the economy since they represent a significant portion of US employment. The optimism has shot up since the election to the levels since during the first Trump administration. This indicator can tell us something about the direction of small cap stocks. However, we have seen a large spike in small business uncertainty which will offset some of the optimism in terms of real action by firms. The uncertainty should come down as we better understand current policy. The optimism will stabilize if the promised policies are followed.
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