Financial Markets Running on “Hope” for Continuing Stimulus

Financial Markets Running on “Hope” for Continuing Stimulus

Financial Markets Running on “Hope” for Continuing Stimulus


In this world of easy money, where the markets hope the near-Zero interest rate policies to continue, there really should be hope for a growing not stagnant economy.

This week;s economic reports have been dominated by a very strong consumer confidence report. The Conference Board reported that August’s Consumer Confidence Index came in at an unexpectedly strong 101.1 as of 18 August.

The number was than expectations, the July reading was 96.7. It was also a series high dating back to September 2015. The consensus had expectations of 97.3.

Improvements were seen in both the current and expectations components. The Present Situation Index rose from 118.8 to 123.0, while the Expectations Index improved from 82.0 last month to 86.4.

The Director of Economic Indicators at The Conference Board, said: “Consumer confidence improved in August to its highest level in nearly a year, after a marginal decline in July. Consumers’ assessment of both current business and labor market conditions was considerably more favorable than last month. Short-term expectations regarding business and employment conditions, as well as personal income prospects, also improved, suggesting the possibility of a moderate pick-up in growth in the coming months.”

Consumers’ appraisal of current conditions improved in August, while their optimism regarding the short-term outlook was said to have also picked up too.

Below is the breakdown of  the consumer sentiment outlook as reported Tuesday, as follows:

  1. Those stating business conditions are “good” increased from 27.3% to 30.0%.
  2. Those saying business conditions are “bad” remained virtually unchanged at 18.4%.
  3. Those claiming jobs were more “plentiful” increased from 23.0% to 26.0%.
  4. Those claiming jobs are “hard to get” also rose, from 22.1% to 23.4%.
  5. The percentage of consumers expecting business conditions to improve over the next 6 months increased from 15.7% to 17.3%.
  6. Those expecting business conditions to worsen decreased from 12.4% to 11.1%.
  7. The proportion expecting more jobs in the months ahead rose from 13.5% to 14.2%.
  8. Those anticipating fewer jobs remained virtually unchanged at 17.5%.
  9. The percentage of consumers expecting their incomes to increase improved from 17.1% to 18.8%.
  10. The proportion expecting a decline decreased marginally from 11.0% to 10.7%.

The market is now and continues to hope for decent economic readings in here. The hope is that just marginally positive economic reports will keep the US Fed from hiking interest rates too fast and too much.

I believe that economic policy in the US, EU, Japan is will remain easy for some time to come.

Thursday, the US major stock market indexes finished at: DJIA +18.42 at 18419.30, NAS Comp +13.99 at 5227.21, S&P 500 -0.09 at 2170.85

Volume: Trade was light again with 805-M/shares exchanged on the NYSE

  • Russell 2000: +9.2% YTD
  • S&P 500: +6.2% YTD
  • DJIA: +5.7% YTD
  • NAS Comp: +4.4% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Neutral (0.20) Neutral (-0.09) Neutral (0.10) Very Bullish (0.58)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Neutral (0.19) Neutral (0.14) Neutral (0.15) Bullish (0.29)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bullish (0.30) Neutral (0.09) Bullish (0.48) Bullish (0.33)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.40) Neutral (0.05) Bearish (-0.49) Very Bearish (-0.75)

Stay tuned…


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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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