US Consumer Confidence (MSI) Dives in July

US Consumer Confidence (MSI) Dives in July

US Consumer Confidence (MSI) Dives in July


Consumer Confidence in the US dove in July as UK’s vote to leave the EU, US has high-income earners on edge.

The University of Michigan’s preliminary Sentiment Index (MSI) fell to 89.5, a 3 month low, from 93.5 in June. The median projection survey called for No Change.

The Brexit vote’s outcome caused global equity markets to briefly slump, giving Americans in the upper 33% of the income scale reason to shudder over their finances. The subsequent rebound in stocks means confidence probably will soon regain some of its lost ground, according to Richard Curtin, the MSI’s director.

“Prior to the Brexit vote, virtually no consumer thought the issue would have the slightest impact on the US economy,” Mr. Curtin said in a statement. “Following the Brexit vote, it was mentioned by record numbers of consumers, especially high-income consumers.”

The current conditions index, which measures Americans’ perceptions of their personal finances, declined to 108.7 from 110.8 in the prior month.

While slightly fewer Americans reported recent gains in finances, the least since Y 2007 said their balance sheets had deteriorated.

The gauge of expectations 6 months from now dropped to 77.1, the lowest since September 2014, from 82.4 in June.

Respondents expected the inflation rate in the next year will be 2.8%, compared with 2.6% in the June survey. The increase was propelled by those in the lower-income brackets, according to the report. Over the next 5 to 10 years, they project a 2.6% rate of price growth, the same as in June.

The 23 June referendum that solidified the UK’s decision to leave the EU briefly sent financial markets due South.

The Standard & Poor’s 500 Index and the DJIA have since reached record highs, but uncertain prospects for global growth after Brexit threaten to negatively impact business decisions and, in turn, weigh on consumer sentiment.

“While stock prices quickly rebounded, an underlying sense of uncertainty about global prospects as well as for the domestic economy have not faded,” Mr. Curtin said in the statement. “To be sure, the overall decline in the sentiment index was rather minor, and could be anticipated to recover some of those losses in late July or early August.”

FLASH: Turkey’s Army says it seized power in a military coup, airports were shut, access to Internet social media sites was cut off, and troops sealed off the two bridges over the Bosphorus in Istanbul.  Soldiers took control of TRT state television, which announced a countrywide curfew and martial law. An announcer read a statement on the orders of the military that accused the government of eroding the democratic and secular rule of law. The country would be run by a “peace council” that would ensure the safety of the population, the statement said. TRT later went off the air. Celebratory gunfire erupted in Syria’s capital Damascus as reports emerged that President Erdogan had been toppled, and people took the streets to celebrate there and in the government-held section of the divided city of Aleppo.

Friday, the major US stock market indexes finished at: DJIA +9.45 at 18515.79, NAS Comp -4.47 at 5029.59, S&P 500 -2.05at 2161.68

Volume: Trade was light with 853.1-M/shares exchanged on the NYSE.

Note: The US  stock market enjoyed its 3rd consecutive weekly advance that drove the S&P 500 and DJIA to fresh record highs. The S&P 500 gained 1.5% on the week, and DJIA +2.0%.

HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Bullish (0.31) Neutral (0.19) Very Bullish (0.50) Bullish (0.25)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Bullish (0.25) Bullish (0.25) Bullish (0.35) Neutral (0.14)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bullish (0.30) Neutral (0.02) Very Bullish (0.56) Bullish (0.31)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bullish (0.30) Neutral (0.02) Very Bullish (0.56) Bullish (0.31)

Have a terrific weekend.




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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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