Do You Doubt U.S. Growth? Business Confidence Spikes To 2004 Levels

The election of Donald Trump has everyone from consumers, homebuilders and small businesses elated. Across each of these categories, confidence readings are through the roof. Apparently, the prospect of lower taxes and the removal of bureaucratic red tape have everyone excited.

Who’d have thought?

The electricity is palpable. In case there was any lingering doubt, the latest reading of the NFIB’s Small Business Confidence index smashed Wall Street’s tempered expectations.

The index yesterday showed a spike to 105.8, a level not seen since 2004, and a massive ramp from November’s print of 98.4. “Warm up your neck before trying to look straight up at the DEC Small Business Confidence Print!” Hedgeye CEO Keith McCullough wrote yesterday.

Just look at the Chart of the Day below (maybe consider stretching those sternocleidomastoid and trapezius muscles before you take a peek).

Click to enlarge

On yesterday’s small business exuberance, the Nasdaq hit its third day of all-time closing highs in a row. It’s crystal clear why. Since November, U.S. economic data has brightened significantly. Whether you’re looking at Durable Goods, Retail Sales, ISM (Manufacturing or Services indexes), or Industrial Production, all have been improving over these last few months.

That’s been a boon for the U.S. economy. The third-quarter GDP report of 2016 stopped slowing, rising to 1.7% year-over-year growth from a low of 1.3% in June. That capped five consecutive quarters of deceleration from the peak of 3.3% in March 2015.

Bottom Line

Trumphoria rages on. We suggest buying U.S. stocks. Sell gold (NYSEARCA:GLD) and long-term bonds (NYSEARCA:TLT) that perform poorly when U.S. growth is accelerating. There’s no sense getting off this train just yet.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.