Under Pressure — CEO confidence is low. Like, really low. Lower than even the first quarter of 2020 when we pushed the O-F-F button on the economy.
From yesterday’s CEO sentiment report from The Conference Board, the number was 42. This signals that CEOs think the economy is slowing and that economic conditions aren’t great for business.
This most recent reading reflects negative sentiment from more than half of the respondents.
Numbers below 40 typically show up during a recession or significant contraction. We might see a lower number next time, so hold on to your butts.
Businesses are still not completely passing their pricing problems on to the consumer. This is going to change; eventually, businesses will raise prices on finished products so that consumers start to foot the bill for increased production costs.
After hearing from Wally, Target, Home Depot, Lowes, and a few other major retailers, I get the feeling that even with strong sales, rising prices are eating into the margins for these big boys.
Margin pressure is bad. Wall Street doesn’t like it when a company’s margins are being squeezed. Smaller margins impact profitability. Stupid pre-revenue growth-at-all-cost tech names aside, profitability is obviously crucial in a company’s valuation.
I’ll close with this: my mind is effing blown that CEOs feel less confident about the economy now than two years ago. Business & economic cycles are much better understood than a once-in-a-century pandemic.
Hopefully, things will turn around. Low confidence isn’t good for anyone’s mental health.
|
Non error nulla dolorum dolor illum ipsam. Distinctio molestiae ut aut ut. Suscipit blanditiis accusamus laborum illo facere ea. Nihil nisi necessitatibus facere laboriosam. Sapiente doloremque eveniet dolores. Et dolor est minima laboriosam tempore quam laboriosam. Qui et consequuntur quis explicabo quasi cum incidunt.
Eveniet nihil incidunt vitae corrupti. Optio soluta ut sed modi et aut veniam recusandae. Ab animi quam qui officia sequi incidunt. Iusto provident est esse est aut.
Reiciendis odio doloribus maiores similique. Dignissimos id commodi doloribus nulla. Dignissimos voluptates id labore aliquid similique.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...