Displaying items by tag: consumer confidence

Wednesday, 26 September 2018 10:44

Confidence is a Big Problem for the Stock Market

(New York)

Consumer confidence in the United States is at an 18-year high. The last time Americans registered a feeling of confidence this high was in September 2000. However, that could be a big problem for the stock market. Consumer confidence can prove a counter-indicator. The highest ever reading for the measure was recorded in May 2000, just before the Dotcom crash. Small business confidence is even higher, running at a 45-year peak. According to one analyst, “[To] any market historian, that does not guarantee a low-risk market, or another big bull market leg on the horizon”.


FINSUM: These kind of ultra-high measures do worry us as we feel healthy gains come in periods of reasonable concern, not euphoria.

Published in Eq: Large Cap
Wednesday, 15 August 2018 08:54

Why the S&P 500 Will Surge to End the Year

(New York)

Stocks have done very well over the last month and a half. The correction—one of the longest on record—ended and stocks are back near an all-time high. But where do we go from here? One Wall Street analyst says the S&P 500 is in for major gains, with the index set to rise 12% before the end of the year. The analyst, from Cannacord Genuity, sees surging corporate earnings and rising consumer confidence as key to the market expansion. He sums up his view this way, saying “There is no doubt the unpredictable news backdrop of a potential trade war with China and a rise back to 3 percent in the 10-year U.S. Treasury yield can cause increased volatility, but the fundamental backdrop commands using it as an opportunity to add risk”.


FINSUM: The principal components of the argument seem sound, but we will admit we are a bit concerned about an earnings peak even though history tells us not to be.

Published in Eq: Large Cap

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