Consumer Confidence Dims on Economy
$DIA, $SPY, $QQQ, $VXX
Consumer confidence slid in July from the prior month on dimmer views of the US economy’s prospects and lingering concerns among higher-income earners about global market conditions.
The University of Michigan said Friday that its final index of sentiment (MSI) declined to 90 this month from 93.5 in June. The median projection in a survey of economists called for a reading of 90.2 after July’s preliminary figure of 89.5.
A record share of households with incomes in the top third mentioned the UK’s decision to leave the EU was weighing on outlooks. The gap between current views of the economy and expectations last month widened in July.
“While concerns about Brexit are likely to quickly recede, weaker prospects for the economy are likely to remain,” Richard Curtin, the Michigan survey’s director, said in a statement.
The Commerce Department said Friday that the US economy expanded in Q-2 at a 1.2% rate, less than projected, after a 0.8% advance in the 1st 3 months of the year that was weaker than previously estimated.
The survey showed that year-ahead prospects for the economy dropped to the lowest level in 2 years. Consumers’ main concern was that slower growth would translate into rising unemployment.
Estimates in the Bloomberg survey of economists for the Michigan index ranged from 88.8 to 94. Friday’s consumer sentiment figure compares with an average reading of 92.9 in Y 2015.
The sentiment survey’s current conditions index, which measures Americans’ assessment of their personal finances, fell in July to 109 from 110.8 last month. The measure of expectations 6 months from now decreased to 77.8 from 82.4.
Americans anticipated an inflation rate of 2.7% in the next year, up from 2.6% in June. They expect prices to rise 2.6% over the next 5 to 10 years, the same as in the prior month.
Despite the setback in sentiment this month, consumers have shown they are more willing to spend than they were at the start of the year.
Personal consumption climbed at a 4.2% annualized rate in the 3 months ended in June following a 1.6% pace in Q-1, the US Commerce Department’s GDP figures showed.
The spending surge likely reflects months of continued job growth as well as a nascent pickup in wages.
What’s more, low prices at the pump are helping keep more disposable income in consumers’ pockets. The average price of a gallon of regular gasoline was $2.14 as of 27 July, according to motoring group AAA.
The report on sentiment showed that 24% of respondents said their finances had worsened in the past year, the smallest share since Y 2007.
Friday, the US major stock market indexes finished at: DJIA -24.11 at 18432.24, NAS Comp +7.15 at 5162.13, S&P 500 +3.54 at 2173.60
Volume: Trade was end of the month heavy with 1.12-B/shares exchanging hands on the NYSE
- Russell 2000 +7.4% YTD
- S&P 500 +6.3% YTD
- DJIA +5.8% YTD
- NAS Comp +3.1% YTD
|HeffX-LTN Analysis for DIA:||Overall||Short||Intermediate||Long|
|Bullish (0.33)||Bullish (0.29)||Bullish (0.37)||Bullish (0.33)|
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|Bullish (0.34)||Bullish (0.35)||Bullish (0.33)||Bullish (0.33)|
|HeffX-LTN Analysis QQQ:||Overall||Short||Intermediate||Long|
|Neutral (0.22)||Neutral (0.10)||Bullish (0.44)||Neutral (0.11)|
|HeffX-LTN Analysis VXX:||Overall||Short||Intermediate||Long|
|Bearish (-0.32)||Bearish (-0.32)||Bearish (-0.35)||Bearish (-0.29)|
Have a terrific weekend…
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