The continued US government shutdown means there remains a drought in official economic data, putting extra emphasis on unofficial data points. One such set of data is monthly small business optimism from the NFIB released this morning. The headline index dropped to 98.8 in September versus 100.8 previously in August.  As we often note, including in our discussion of the report’s labor market readings in today’s Morning Lineup, the NFIB survey has historically leaned right similar to how Michigan Confidence has leaned left. Such biases mean that the data has to be taken with a grain of salt and some categories become more worthwhile in gauging economic health than others. As shown below, optimism surged in the wake of President Trump’s election last year.  A similar surge was seen following the 2016 presidential election and vice versa after President Biden won in 2020.  At current levels, optimism is middling versus the past decade’s range.

One area that is far from middling is uncertainty. Again, this is another indicator from NFIB that is a bit more sensitive to politics. Typically, the Economic Policy Uncertainty Index soars during Presidential election years and then pulls back in the following months; usually that pullback is regardless of which party came out on top.  During last year’s run up to the election, this index saw a record climb, but interestingly, it has yet to reverse lower as it usually does after elections.

In other words, small businesses are still on edge when it comes to policy.  That is putting a dampener on sentiment with fewer businesses reporting a positive outlook for the economy/general business conditions.  Similarly, fewer respondents reported that they view now as a good time to expand their businesses.

When it comes to the question of business expansion, respondents are also asked for the reasons for given outlooks.  For those reporting negative and uncertain outlook, the largest share of respondents (40%) reported that it is due to economic conditions. That is up versus the multi-year low of 32% two months prior.  While that reading is rebounding, it hasn’t really reversed the downtrend of the past several years.   While not shown in the chart below for legibility, the next two most common reasons given were cost of expansion and political climate; each of those came in at 12% which is right in line with their respective average over the past year. Finances and interest rates were right on their heels at 11%, and this reading has the more interesting trend. The share viewing rates and finances as restrictive to expansion has steadily been climbing despite the latest rate cuts.

Finally, we would note that sales prospects are not a very common reason given for a negative or uncertain expansion outlook, and paired with other categories in the report, would overall suggest solid demand. As shown below, actual sales changes are negative (as has been the norm for the better part of the past 20 years) but approaching some of the strongest levels since Q1 2023.  Meanwhile, actual earnings changes have rocketed higher up to the best level since December 2021.

The Q3 earnings season will begin in earnest tomorrow morning with four big banks and brokers set to report ahead of the open.

As the snapshot below from our useful Earnings Explorer tool shows, though, the peak of earnings season is still a couple of weeks away later this month.  This quarter’s biggest day for earnings will be Thursday, October 30th, when roughly 250 companies will report Q3 numbers.

Eight big banks and brokers will report Q3 numbers in the next few days.  We created a custom portfolio — just like subscribers can do — that includes each of these eight stocks so that we can take a closer look at them.

Starting with earnings, tomorrow morning we’ll hear from Citigroup (C), Goldman Sachs (GS), JP Morgan (JPM), and Wells Fargo (WFC).  Of these four stocks, Goldman has the strongest “beat” rates, while Wells Fargo has the weakest.  (A stock’s beat rate represents the percentage of the time it has beaten consensus analyst estimates.)

Bank of America (BAC) and Morgan Stanley (MS) will then report on Wednesday morning, while Charles Schwab (SCHW) and Interactive Brokers (IBKR) will report on Thursday.

In terms of share price reactions to earnings, Morgan Stanley (MS) is the name that has historically averaged the biggest gains on its earnings reaction days.  IBKR has averaged the biggest declines and been the most volatile of the names listed.

Our Custom Portfolios tool also lets you create baskets like the one below in a few simple clicks to monitor trends and trading ranges for the stocks and ETFs you care about most.

For our “Banks and Brokers” basket, you can see that all of these stocks have pulled back sharply within their ranges over the last week, following Friday’s big pullback.  Heading into this week, IBKR was the only name still in “overbought” territory, while SCHW and WFC had both moved into “oversold” territory.

Regardless of recent moves, all eight of these stocks are up at least 10% year-to-date, with IBKR up the most at 56.2%, followed by Goldman and Citi with YTD gains of more than 33%.

Along with the ability to easily monitor upcoming earnings reports as well as trend and timing measures, our Custom Portfolios tool lets you quickly scan price charts as well.

Below is a snapshot of six-month price charts for our Banks and Brokers basket.  Notably, Goldman (GS), Morgan Stanley (MS), and Interactive Brokers (IBKR) were the only three that managed to hang on above their 50-DMAs following last Friday’s big market drop.  The rest broke hard below their 50-DMAs, which puts their long-term uptrends at risk.

If you like this analysis and want to try it out with your own stocks and ETFs, simply start a Bespoke Institutional trial now and proceed to the Custom Portfolios tab.  It’s super easy!  Use this link to get a complimentary two-week trial plus 20% off the regular monthly rate if you choose to stick with it.

Precious metals prices have been going crazy lately. Gold’s move above $4,000/ounce last week garnered the most headlines, but its gains look pedestrian compared to other metals like silver and platinum. We’ll start with gold, though. Over the last six months, gold rallied 26.9%, and as of last week, it was up over 35% in six months. The last time it rallied that much in half a year was back in 2008.

There’s nothing wrong with a gain of 26.9% in six months, but silver is still up by more than twice as much and was up over 65% in the trailing six months just last week. Historically, silver has been more volatile than gold, so its current run is ‘only’ the strongest since 2020.

As if you think silver’s run has been impressive, platinum says “hold my beer.” Through today, platinum was up over 80% in the last six months, and as of last week, it was up over 86%. In futures pricing dating back to 1986, platinum has never had a larger six-month gain.

While all three metals have had widely varying rallies in the last six months, relative to their respective histories, their moves have ranked above the 95th percentile versus all other six-month periods. The charts below show the performance of gold, silver, and platinum since 1986, which is when we have pricing data for all three commodities. In each chart, we have also included red dots to show the times when all three metals simultaneously had six-month rallies that ranked in the 95th percentile or above of their respective histories.

The only other periods when all three metals simultaneously had six-month rallies that ranked in the 95th percentile or above were in May 2006, February to March of 2008, May to early June of 2009. and September 2020.  Within the equity market, we often see overbought markets becoming more overbought, but in the case of these three metals, it wasn’t uncommon to see at least a short-term pullback following prior moves like the one we’ve seen recently.