Tuesday, July 30, 2019

Consumer confidence is soaring

If you happen to watch the Democratic debates tonight and tomorrow, think about this: consumer confidence these days is approaching record high levels, and the impetus to the current surge in confidence can be traced to Trump's election in late 2016. Challengers to Trump are going to have a tough time convincing voters that change is needed.

The charts that follow show three of the most widely-followed indices that track consumer confidence. All data is as of July 2019. Chart #1 is the Conference Board's index of Consumer Confidence. Chart #2 comes from the University of Michigan. Chart #3 comes from Bloomberg.

Chart #1

Chart #2

Chart #3


Tom L said...

i think the Democratic spin cycle will be that it is so good it's really bad...

Thanks again Scott.

John A said...

The only one of those two charts that is "soaring" is the 3rd one. The first two have stalled in the past year or so.

Benjamin Cole said...

To watch the Democrats is appalling. I dislike identity politics of any kind whether dog whistles from the right or the Quad Squad. But the Democrats have decided that identity politics must be at the forefront of their approach to policy. P.U.

The Democrats should represent the productive employee class. They should not push for more welfare or government programs but for lower taxes on wages.

The Democrats may even find a way to lose to Donald Trump.

steve said...

Of course, a lot can change by 11/20...

John said...

If you read Steven Covey's book "Seven Habits of Highly Successful People." in the back there is a table pertaining to "value centers." Some people are family centered, others possession centered, money centered, principle centered, and more. Covey argues we should be principle centered. For the money centered, Trump may seem like a good choice. If one is concerned about governance, integrity, science-based decisions, equal opportunity, environment, and America's role on the international stage, they're probably not voting for Trump.

randy said...

Those polls must have missed the NYTimes readership. The Old Gray Lady has over the last few years assembled an editorial staff of young idealists whose mission is 100% to frame a picture of America that is from some dystopian movie. These editorialists show no sense of perspective, history or nuance. Not to mention their writing sucks - comes across as well as college paper writers. It's a massive fiduciary failure, along with what's going on in colleges and even K-12, that is arguably more damaging than Fox in polluting our civil society. I was thrilled last night to see the moderate Dems be more forceful. Will be making donations to Delaney and Hickenlooper today.

steve said...

If you watched two minutes of the dem debate last night and didn't know any better you would swear we had record unemployment, inflation out of control, people rioting in the streets, stock market crashing...what a bunch of total BS!

Let's review; unemployment at basically zero (for all practical purposes), inflation sub 2%, mortgage rates at near all time lows, GDP 2%+ (if DT would end is insanity on trade it would def be higher), stocks at or near all time highs, consumer confidence good. I mean it could ALWAYS be better but it ain't bad!

leo said...

when economy is bad, democratic could blame and compaign "change";

when economy is good, democratic could say only the rich benefited, majority including undocumented immigration not good enough.

Johnny Bee Dawg said...

Worst Fed Press conference I can recall in my career.
Cant decide if Jay Powell is massively incompetent, undermining his own policy move...or if it was on purpose.

Nobody can now articulate Fed policy now...especially Powell.
After his idiot babble in the Q&A, the front end of the curve inverted WORSE, and the Dollar soared.
Markets plunged almost 500 points in minutes. Zero credibility left. No business can plan properly with this discombobulated Fed "policy".

All he had to say was we screwed up by raising rates in 4th quarter, and we are righting those moves. PERIOD.
Just let the bond market know you "get it', and are following its signals. Show a basic understanding of his job.
The market would have done all the Fed's heavy lifting, and the curve would have been righted.
Instead, he just made it harder than ever for future Fed moves to fix all of Powell's errors.

An incredibly display of incompetence.
Swamp rats infesting the Fed.

The Federal Reserve is the biggest chaos agent on planet earth right now.

Fred said...

JBD- who appointed Powell to chair the Fed? I'll hang up and listen.

Johnny Bee Dawg said...

Trump pointed Powell. How could you not know that?
Huge mistake appointing a Swamp Rat. Same as Christopher Wray at FBI.
Whenever Washington, DC heaps universal praise on someone, you know its a mistake.

Grechster said...

Scott: I wonder if you might update that great chart of yours, the one that shows the real Fed Funds rate against the 5-year TIPS. (The Fed funds declined by 25 bps but the TIPS spread has also declined. I believe if this chart were publicly talked about it would lift a lot of the confusion that is being expressed on CNBC and other financial fora. My opinion: Despite the historically low Fed Funds rate, the Fed is still too tight. I believe your chart shows that in one terrific snapshot.)

rich said...

"Whenever Washington, DC heaps universal praise on someone, you know its a mistake.'

As much as i hate to agree with anything Mr. Dawg writes,
I have to agree with the above statement,
and will assume he hired someone to write his comment !

I can't imagine anyone here watching a Dumbocrat debate.

Even though it was it Detroit, not that far a drive from where I live,
you's have to pay me $100 to go there and listen to the socialists.
($200 if Hillary Clinton was there)

I imagine they spent most of their time trashing Trump
and promising free stuff for everyone except "millionaires".
Concerning the confidence charts:

I'd like to point out that the old Grannis chart (not here)
that says "stocks climb a wall of worry", is completely wrong.

Stock climb as confidence rises,
and then fall as worries rise.

The very high confidence / confidence peaks
in many of the charts in this article
are followed by those pesky gray vertical bars on the charts.

What are they ?

steve said...

Our illustrious complete imbecile POTUS just announced another 10% tariff on China due 9/1. To wit; market plunge. Of course, I'm sure JBD had seen this coming given his 100% percipient market calls.

I do have to agree though that Jay looks "confused" as head of Fed. His days could be numbered. POTUS should never berate a Fed chairman though. It's not just bad form, it sends a bad message to the markets that the Fed, ostensibly independent can be manipulated by a petulant child POTUS.

That even Scott is getting less optimistic is troubling...

oh and did you see what the ten year is doing? 1.89%!

Johnny Bee Dawg said...

If Powell had handled his job correctly, clearly outlining a policy that corrects his earlier horrible mistakes, the market would have shrugged off Trump’s hardball strategy with China, which he’s been telegraphing for months.

Stock market recovered this morning only up to the level where Powell started speaking yesterday...and was repelled. Repelled before Trump said a word about China today. Powell DOES NOT have Trumps back in trade negotiations at this point. Let’s see if he apologizes again.

FWIW, Steve, I was up almost 1% today.
Shopify, Trade Desk, Workday, Gold Miners and TLT sure helped.
The S&P Low Volatility Index didn’t lose a dime today.

Powell wasted ammunition yesterday with his mouth, shooting one of his precious bullets into the ground, instead of hitting deflationary forces directly in the head. Powell has dug himself a hole with markets. Let’s see if he stops digging.

Fred said...

JBD- Trump's trade policy is a disaster. And yes, I of course know that Trump appointed Powell. Everyone else is to blame for his stupidity because you think God sent him to save the US.

randy said...

It is curious JBD that you are completely burying Powell for his failure to properly nuance a quarter point move, but seem to be giving Trump the benefit of the doubt on trade. Trade is the elephant destabilizing right now. We will not "win". We may not lose as badly as China, but their economic setbacks will hurt us as well.

Johnny Bee Dawg said...

Trump’s trade policy has certainly been a “disaster” for China. Slowest growth in 27 years, there.

We, on the other hand, had the fastest GDP growth and wage growth in a decade, soaring consumer confidence, record low unemployment for our most marginalized citizens, and 50 year low unemployment for the rest of us Americans.
We just had record high stock markets, and muted inflation, despite the FED blunders and a 2+ year coup attempt within our own government.
We have record high tax revenue, and our debt-to-GDP ratio is now lower than when Donald was elected, despite the idiot spending bill Paul Ryan stuck him with.
We currently have 1.6 million more job openings than people looking for work.
Trump has stripped away thousands of overbearing and useless regulations, leaving the lowest number of rules and pages in the Federal Register since the mid 70s.
Health reform is coming, bringing more transparent pricing, and better market competition.

And criminals within the government are being investigated seriously for the first time in decades.
The IG is referring criminal conspirator, Jim Comey, for prosecution. Rule of Law is FINALLY being respected.

If these delicious fruits are the result of “disaster” policies, I’m looking forward to more!
8 more years of em, according to sleepy Joe Biden!

God Bless Donald!!

steve said...

JBD, I will give you this; you are "indomitable" and I have to admit SPLV has been on a tear. You must be a gazillionaire with perfect timing and selection. Thank you for deigning to elucidate us with your perspicacity.

That said, if Dt loses in 2020 and gives us a socialist, it will be because of his trade policy and his despicable personality (mainly via tweets) NOT the Fed.

Johnny Bee Dawg said...

Nobody needs perfect timing & selection. Just stay in relative strength winners, and cut the losers.
Gold Miners Index just yesterday gave its 5th consecutive rel strength "buy signal" vs the 10 year yield.
Nobody knows when it will end, and nobody has to. When it ends, move on to the next winner.

Donald has made you money if you were smart enough to go pick it up.
Jay Powell has tried his best to take it away.
Make fun of me all you want for paying attention, and saying so. Enjoy yourself!

If Trump loses in 2020 it will be because of election rigging!
There isn't a DEM on stage, in either debate nite, that could be POTUS, and every DEM knows it.
Hold your nose, and clutch your pearls and watch a Trump rally crowd sometime.
Trump articulates EXACTLY his intentions, and follows thru toward each goal with amazing energy.

Then watch Sleepy Joe fire up literally dozens at a "rally" with incoherent flip-flop babble.

If American voters were to hate prosperity enough to ACTUALLY vote out Donald and put in a Socialist, then We The People will get everything We deserve. That won't be Donald's fault either. He is doing EXACTLY what he ran on. Doing everything, including temperament, that got him elected. Clutch your pearls all you want, but the common man is finally winning for the first time in decades, and the common man knows it.

Even though growth recently started taking off in June, S&P Low Vol is still ahead of regular SPX, year to date, by 125 bp.
Bonds and certain non S&P REITS are screaming, too. And made huge gains yesterday during the meltdown.
You could pay attention, too, and then you wouldn't have to make snide comments about those who are. But definitely enjoy yourself.

Fred said...

By election rigging do you seriously mean illegal tampering with election results? If you believe this you are in need of medication. I think the nation will survive if Trump loses the election. We've somehow managed to do so for 240 years without him.

Johnny Bee Dawg said...

Yes, Fred.
And the nation has survived lots of election rigging, already.

Fred said...

What's your source for this claim, Alex Jones?

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