The NFIB Small Business Optimism Index survey recorded its second highest reading in the survey’s 45-year history coming in at 107.9.  The survey was within a whisper of the record high of 108 recorded in July 1983.  The number of owners planning on creating new jobs, and those with job openings, came in at record highs.  Those planning on creating jobs were a seasonally adjusted 23%, up 3% from June.  More owners reported having job openings they could not fill; current job openings rose 1% to 37%.   This was cited as the number one business problem.   

Highlights from NFIB Small Business Optimism:

• Eight percent of owners reported higher sales in the past three months compared to the prior three-month period
•  Thirty-five percent of owners are expecting conditions to improve
• Strong sales have depleted inventories
• Strong demand is allowing firms to raise prices

“Small business owners have never been so optimistic for so long, helping to power the second longest expansion in history,” said NFIB Chief Economist Bill Dunkelberg. “Despite challenges in finding qualified workers to fill a record number of job openings, they’re taking advantage of this economy and pursuing growth.”

Household Debt and Credit

The Federal reserve bank of NY issued its quarterly report on household debt and credit.  Total household debt increased by $82 billion (0.6%) to $13.29 trillion in the second quarter of 2018.  This was the 16^th consecutive quarterly increase, the total is $618 billion higher than the previous peak in the second quarter of 2013.  

Housing Debt

• Mortgage originations, the largest component of household debt, rose 2.1% to $437 billion
• Mortgage delinquencies improved; 1.1% of mortgage balances were 90 or more days delinquent, compared to 1.2% in the first quarter

Non-Housing debt

• Auto loan balances increased by $9 billion to $1.24 trillion, continuing a six year upward trend
• Credit card balances rose 1.7% to $14 billion 
• Credit card delinquency rates fell 0.1% to 7.9%
• Student loan debt fell $2 billion to $1.41 trillion
• Student loan debt 90+ days delinquent was 10.9%, a small increase over the first quarter, but 2.5% lower than in the second quarter of 2017

Lower students loan debt may help free up some first-time home buyer money.  

A rebound in the Turkey equity market (TUR + 8%) helped propel Wall Street higher today.  Home construction/builders, retail and financials are the leaders.  The Retail Index, XRT, is up 1.9% and breaking into all-time high territory.   Tapestry (TPR…formerly Coach) is up 13.5%, Advance Auto Parts (AAP) + 8%; Abercrombie & Fitch (ANF) + 6.9% and Michael Kors (KORS) + 3.4%. 

Metals and materials are laggards for the second day.  The Metals and Mining Etf, XME, is lower for the second day in a row, down 0.50%.

• The Dow is higher by 0.44%
• The S&P 500 is higher by 0.62%
• The Nasdaq was higher by 0.61%
• The Russell 2000 is higher by 1.12%

Breadth: Decidedly Positive, excluding new 52-week highs/lows

• NYSE advances 2,190 to declines of 811; new 52-week highs 76 to new lows 70
• Nasdaq advances 1,864 to declines 1,051; new 52-week highs 86 to new lows 82