The biggest employer in the U.S. is small businesses, they are also one of the largest sources of government revenue (taxes). The National Federation of Independent Business said it's optimism index fell for the second straight month, dropping .3 points to 88 for December. They cited continued weak sales and threatening domestic policies from Washington is curtailing optimism. Higher taxes and contracting revenue is the leading concern among small businesses. The National Health Care policies, credit availability, government stimulus/aid have all but forgotten the small business community.  The data included future capital expenditures, which did rise for small businesses 2% to 18%, but was still only 2 points above the 35 year record low. The data is putting some pressure into the small cap sector and futures are slightly under pressure.  The data injects some negative sentiment into the private sector jobs and ADP forecasts.

                      November showed imports climbed faster than exports. Economist forecasted a 34.6 billion, but the gap expanded 9.7% to 36.4 billion. If we adjust for price inflation the gap actually increased 40.7 billion. China is growing fast, as reported yesterday they have surpassed U.S. in auto sales by a wide margin and we will never be able to catch up again. China is also seeing their imports steadily rise from the U.S. - primarily resources including food. The dollar is playing a big factor in these figures, remember the figures used to calculate gross domestic product, when we exclude price influence the third quarter average of 39.4 billion to current quarter of 39.5 reflects that trade will not have much influence on economic growth in the last 3 months of the year.
                Inventories are low as manufactures pull back to control pipe-lines and prevent over-supply problems into inventories. This mean that we will most likely see some ramping in the manufacturing sectors just to run at demand, which has pushed up some commodity prices - which also contributes to the increase in imports. It is a mixed story - certainly China continues to grow and we are seeing an increase in exports to China - which can help the bottom line of domestic companies (not a big portion of exports have been food and material - rather than durable goods). We are also seeing imports rise, restocking inventories. We must remember that we do need to adjust prices as the dollar has made a significant slip

                      Wal-mart announced that it plans to close 10 Sam Club stores in the U.S. and lay off about 1,500 employees, but it did say it would be possibly adding up to 6 stores by year end. It is a bit of a mix story in the retail sector as companies continue to focus on cost cutting. The stock is seeing some pressure in the pre-market down about 50 cents. We are still waiting to see how the discount stores fared over the holidays. However, for now the story remains cost cutting and managing inventories.

             Europe is down and Alcoa earnings are both pulling down on the futures in the pre-market. Expect a negative opening and down side pressure into the opening session.