Checking the small business economic barometer

During past major market bottoms, the outperformance of small cap stocks has coincided with economic rebounds. The relative returns of small and microcaps appear to be trying to bottom. It is time to check in on how these stocks are doing.

One way to monitor the progress of these stocks is to check in on the health of small businesses. Small businesses are the backbone of the economy. According to the Small Business Administration, US small businesses provide 47% of private sector employment. Equally important to the check-up is the poor bargaining power of small firms, as they act as a sensitive barometer of economic health.

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