Insights on the Economy and Market

2024

Small Business Employment by State
December 2024


This chart shows the percentage of workers in each state employed by small business, defined as companies with fewer than 500 employees.    

Small businesses are a significant part of the U.S. economy, providing jobs and driving innovation. Understanding their distribution helps gauge economic health and workforce dynamics. Entrepreneurs and investors can use this information to identify promising markets for small business ventures or expansion. Communities may identify opportunities for fostering small business growth, which can lead to job creation and increased local investment. Figures rounded; data as of 2022. Source: U.S. Small Business Administration.

Riskiness of U.S. Retail Investors’ Stock Portfolios
November 2024


Since the onset of the pandemic, retail investors have increased overall market risk measured by beta relative to the S&P:500 index within their equity portfolios.   

A higher beta measure relative to the S&P:500 index does not necessarily translate to the overall volatility of the portfolio. Over the last few years, there have been several products launched geared towards the retail investor. The creation of double and triple levered single stock ETFs issued on Mag 7 firms are just one example of various trades retail investors may be participating in to drive this overall phenomenon. Data: JPMorganChase Institute. Chart: Axis Visuals.

How Economic Sectors Perform After the First Rate Cut
October 2024


On September 19th, 2024, the US Fed announced its first interest rate cut since March of 2020. Sectors of the economy tend to react in disparate ways to this action.   

This chart shows a historical representation (1973 – 2024) of how distinct economic sectors have reacted over a 12-month period following the first rate cut of a new cycle. We must keep in mind that each of these sectors is affected to varying degrees by factors that influence performance. Factors including but not limited to inflationary forces, labor market dynamics, and consumer habits all have a role, in addition to the federal funds rate, when it comes to how they will perform over the next 12 months. Rate cut cycle data: 1973-2024. Source: PinPoint Macro Analytics.

Net Flows per Household in States that Legalized Sports Betting
September 2024


There has been a consistent downtrend of assets deposited into brokerage accounts within the 25 US states and D.C. that have legalized sports betting between 2018-2023 quarterly for the subsequent 3 years post legalization.  

Consumers may be trading off long term wealth creation for instantaneous euphoria or heartbreak to make money quickly. Individuals could possibly be viewing sports betting or gambling as a substitute to traditional investing. In our opinion, sports betting should be viewed as more of a consumption expenditure versus an investment. Poor financial wellness decisions in the moment can seem inconsequential but those decisions overtime can compound and reduce the probability of achieving one’s goals. Data: “Gambling Away Stability: Sports Betting’s Impact on Vulnerable Households” Chart: Jacque Schrag/Axios

U.S. Aggregate Investable Funds
August 2024


The amount of cash on the sidelines as a percentage of equity and bond market value is at record lows. 

A low ratio of investable funds can be viewed in two ways. 1) There’s a greater percentage of wealth tied up in the capital markets and 2) if investors want access to that wealth, they’ll have to turn those investment to cash. With a lower supply of investable funds and an increased demand for cash, this has the potential to shift market equilibrium.  If the demand for cash does cause a shift with the investable funds ratio at a record low, securities prices may have to adjust in order to increase buyer appetite. *Including Money Market Funds, Time And Saving Deposits Of Households And Investment Organizations, And Checkable Deposits Of Investment Organizations; Source: BCA Calculations. **Wilshire 5000 Market Cap.