The rise in the NFIB index in January indicated that, in the aftermath of President Donald Trump’s election victory, small business owners were the most optimistic they had been in more than a decade. The extent of the improvement in small business confidence opened up a big gap with the recent market performance of small cap stocks. It’s possible that small cap stocks have a lot further to climb or perhaps small business owners are getting ahead of themselves. The surge in the NFIB index was almost entirely focused in the expectations indices. In particular, the gap between actual and expected small business sales has never been bigger.
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