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Afternoon Note

Consumer Confidence Picks Up

By Charles Payne, CEO & Principal Analyst
5/28/2019 1:36 PM
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Consumer Confidence for May increased to 134.1 from April’s read of 129.2.  For the near term, consumers remain confident that the economy will continuing growing at a solid pace.  Based on consumers’ assessment of current business and labor market conditions, the Present Situation Index increased from 169.0 to 175.2. The Expectations Index, consumers’ short-term outlook for income, business and labor market conditions, increased to 106.6 this month from 102.7 last month.

 “Consumer Confidence posted another gain in May and is now back to levels seen last Fall when the Index was hovering near 18-year highs,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The increase in the Present Situation Index was driven primarily by employment gains. Expectations regarding the short-term outlook for business conditions and employment improved, but consumers’ sentiment regarding their income prospects was mixed. Consumers expect the economy to continue growing at a solid pace in the short-term, and despite weak retail sales in April, these high levels of confidence suggest no significant pullback in consumer spending in the months ahead.” 

Highlights of what consumers said include:

For all the worries over the trade dispute with China, consumer confidence has not been affected.

Speaking of trade, the markets have been in the green for most of the session, however dipped briefly into the red on further comments from President Trump that we are not near a deal with China on trade.  Although the indices are still positive, they are well off the highs.

S&P 500 Index

-0.17%

Communication Services (XLC)

+1.24%

Consumer Discretionary (XLY)

+0.35%

Consumer Staples (XLP)

-0.79%

Energy (XLE)

-0.26%

Financials (XLF)

-0.22%

Health Care (XLV)

-0.04%

Industrials (XLI)

+0.11%

Materials (XLB)

-0.19%

Real Estate (XLRE)

+0.15%

Technology (XLK)

+0.58%

Utilities (XLU)

-0.77%

 

The U.S. Dollar Index rose 0.3% to 97.91. Meanwhile, U. S. Treasury yields continue lower with the 2-yr yield down to 2.12%, and the benchmark 10-yr yield is down to 2.27%. We are not alone, as the yield on the 10-yr German bund is at -0.156%, near its all-time low from 2016.

 


 

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