Some food for thought stats:
- Small businesses factor into roughly 50% of GDP. And today we learned that small businesses are NOT feeling positive or hopeful about the next 6 months of the US economy. A recent small business survey revealed that only 5% of small businesses consider the next 6 months a good time to expand their business. So, small businesses are telling us right now they can survive. They've cut costs. Taken down debt. And to the extent they're still in business, they can survive, but growth? Doesn't sound like it.
- Business productivity gains have been surging for the past few months. The cost of labor has decreased. So, profitable businesses are good but without growth to go with it, this seems to indicate no strong need to employ workers anytime soon. Workers and the consumer = 70% of GDP. So again, not overall good really.
- Based on filings of Form 4 with the Securities and Exchange Commission, insider selling on the past 10 trading days hit $2.4 billion, the third-highest 10-day total this year. Meanwhile, insiders bought only $90 million. In other words, insider selling was a staggering 28 times higher than insider buying on the past 10 trading days.
- Retail investors are snapping up lots of shares corporate insiders are dumping. Based on our daily survey and data from the Investment Company Institute, we estimate that U.S. equity funds took in a whopping $15.1 billion (0.48% of assets) on the past 10 trading days. This 10-day inflow is equal to more than half of the inflow of $30.0 billion (0.94% of assets) in the four months from April through July.
- "Wholesale trade" (a measure of the dollar value of sales made and inventories held by wholesalers) decreased -1.7% for June compared to a -0.8% decrease for May. Another consumer/business indicator that doesn't seem to be showing GROWTH. True, extremely low inventory levels mean some making spikes in restocking, new orders and increased sales when businesses need more goods to sell. But that makes one big ASSUMPTION - that businesses will need more goods to sell and that consumer demand will return to a measurable level.
Perhaps the euphoria of the market rise has been exaggerated the same way the dip to 666 on the S&P was in March. Enough signs of non-growth and you might have to even start wondering about those strongly positive GDP 3Q 2009 forecasts.
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