Donald Trump appointed former-WWE CEO Linda McMahon to head the Small Business Administration, and small business is already giving one heck of a performance.
The stock market has rallied since Trump’s victory, and small companies have been leading the charge. As you can see in the graph below, the Dow Jones Industrial Average has rallied 8.49% since election day, while an ETF that tracks the US Small Cap Value Index (companies with value between $50 million – $2 billion) has been up nearly 14 percent.
Like their stock prices, optimism among small businesses is surging too.
The November Index of Small Business Optimism from the National Federation of Independent Business shows small businesses have gained confidence with the expectation of better conditions under the new Trump administration.
“What a difference a day makes,” said Juanita Duggan, President and CEO of NFIB. “Before Election Day small business owners’ optimism was flat, and after Election Day it soared.”
NFIB Chief Economist Bill Dunkelberg said, “The November index was basically unchanged from October’s reading up to the point of the election and then rose dramatically after the results of the election were known.”
For the full month of November the index surged 3.5 points to 98.4. NFIB marked this as only the third time since 2007 that the index rose above the 42-year average. Small business owners’ plans to hire jumped 14 percentage points from pre-election to post-election, according to the index. Sales expectations also jumped from net four percent to net 20.
It’s not hard to see why optimism is surging, given Trump’s platform. He’ll repeal Obamacare as well as scores of regulations, and lower taxes. That’s good for big businesses too of course, but disproportionately so for those on the smaller end. And it’s those at the smaller end that account for the most American jobs.
As we’ve seen over the past couple of weeks, Trump has attracted business to America without even being President yet. In addition to the deal with Carrier, SoftBank announced they’d be investing $50 billion in America, creating 50,000 jobs in the process. The makers of the iPhone are looking to bring jobs and investment back to America. U.S. Steel said they’d be bringing back 10,000 jobs.
And now, IBM is bringing back jobs. As we reported earlier today here at the Political Insider, IBM announced that they’ll be bringing 25,000 jobs back to America!
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