The Trump Effect: American Consumer Sentiment “Sunny”

The Trump Effect: American Consumer Sentiment “Sunny”

The Trump Effect: American Consumer Sentiment “Sunny”

$DIA, $SPY, $QQQ, $VXX

US Consumer Sentiment rose in March as Americans registered “Sunnier” views about the state of their finances while becoming less upbeat about the long-term economic outlook, University of Michigan (MSI) survey data showed Friday.

Key Points are as follows:

  1. Final sentiment index rose to 96.9 from 96.3 in February
  2. Compares with 97.6 median estimate of economists; preliminary reading was also 97.6
  3. Current conditions gauge, which measures Americans’ perceptions of their personal finances, increased to 113.2 from 111.5 the prior month; while that’s the strongest since July 2005, it’s below a preliminary reading of 114.5

The Big Picture

Sentiment is holding close to its healthiest levels in more than a 10 years even as Americans, especially middle and upper-income earners, monitor an easing in the stock-market rally that could moderate household wealth.

Optimism since the November Presidential election has largely cut along party lines, with Republicans feeling much better that The Trump Administration’s policies will boost growth.

At the same time, Americans of all political ilks have been buoyed by further labor-market strengthening.

 

Economist Takeaways

“The data indicate both rising optimism as well as rising uncertainty due to the partisan divide,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement. “Optimism promotes discretionary spending, and uncertainty makes consumers more cautious spenders, which will result in uneven gains over time and across products.”
Some Other Details

Gauge of expectations was unchanged from February’s 86.5; preliminary reading was 86.7

While Republicans and Democrats had similar views of current finances, nearly 2X as many Republicans as Democrats expected their finances to improve

Partisan divide was little changed between early and late March and over the past several months

Gauge of 5-year economic outlook fell to 103, the lowest since October, from 112 in February

US Consumers saw inflation rate in the next year at 2.5%, compared with February’s 2.7%

Inflation rate over next 5 10 years seen at 2.4%.

Friday, the US major stock market indexes finished at: DJIA -65.27 at 20663.77, NAS Comp -2.61 at 5911.75, S&P 500 -5.34 at 2362.71

Volume: Trade on the NYSE came in heavy with 1.35-B/shares exchanged.

Note: US stocks indexes finished the best Q since 2013.

  • NAS Comp +9.8% YTD
  • S&P 500 +5.5% YTD
  • DJIA +4.6% YTD
  • Russell 2000 +2.1% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Neutral (0.02) Bearish (-0.37) Neutral (-0.06) Very Bullish (0.50)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Bullish (0.41) Neutral (0.13) Very Bullish (0.50) Very Bullish (0.58)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bullish (0.38) Bullish (0.25) Bullish (0.40) Very Bullish (0.50)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.35) Bearish (-0.27) Very Bearish (-0.57) Neutral (-0.21)

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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