Tag Archives: Consumer Confidence

Good News On Housing, Mortgage Rates, And A Happy Consumer … Early Observations

Last week we had two good personal data points concerning housing which set us in motion for additional research.

With residences being one of the larger assets for many, a downturn in prices i.e. 07-09 … caused pause for much of the consumer due to a drop in asset value, creating a negative feed back loop, thereby lowering confidence and spending.

Things may look different this time.

Initial Data Points On Housing/Residence

The jury is still out on all of this, and we would think commercial i.e. Office Properties, raw land, and other similar assets may see negative pressure initially coming from our current situation and the easy pivot to Virtual ….

However a silent winner, or at least a stabilization of value may be residential. It makes sense as there are usually winners and losers when change occurs.

With two noted sales last week, we set out for more information on what may be occurring.

The MBA Purchase index, (includes all purchase mortgage applications) has bounced back strongly and is back to about 90% of the original tracking high, set just a few months ago. Hat Tip RB, for bringing this to our attention, we were very surprised!

Here is a good chart, which is copyright protected, as such, not included in this post.

Mortgage Rates Lower – Included in the nice bounce back of the Purchasing Index above, are the following updated lower Mortgage rates … a second positive to go with the consumer and residence real estate.

While this lowered mortgage rates took time to develop (blip in chart), due to a dash for cash and a wave of refinance, along with underwriters concerns of consumer credit health, due to heightened unemployment, it does appear lower rates may be adding wind to the sails of residential market.

5-16-20 30 year mortgage rate

Consumer Confidence – One of the most widely followed confidence indexes, the University of Michigan Sentiment index last week released their latest results, and found surprisingly the index jumped higher than expected, mostly based on current situations, likely associated with the light at the end of the tunnel of openings.

Here is a chart from last month, again copyright restricts last weeks results, but this index bounced back to almost 74 last week…again surprisingly.

Certainly headed in the correct direction.

- U of M -

So a hot New Homes Mortgage Purchasing Index, along with lower Mortgage rates and a happier than expected consumer may lead to additional good news for the economy, spending, asset prices, and an eventual return to a more normal!

It’s early, and things could change quickly, but the initial bread crumbs look VERY positive!

Have a Great “Positive Consumer” Day!

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.



Hold on … Here Come Important Valuation and Corporate Earnings Charts –

As promised, it’s always good to step back occasionally and make darn sure we are not all being Lemurs (most known for following each other without thought) and gathering together, just before we go over the cliff….

Ok, so you are about to receive a blast of charts… we will code this post Forecast so we can go back and look at the “Forecasts” later….

Is the Market (S&P 500) Expensive?

This is the trailing PE (Price Earnings Ratio) the most macro valuation measure used from our Friends at Factset !

Green dotted line represents, 5 year average, and the dark dotted line represents the 10 year average….

Answer – Not cheap, but MAYBE not as frothy as it may feel at times (present party included) – certainly have been MUCH more expensive in the past…

Remember, tariff progress may release some pent up/held on the sidelines demand!

11-9-19 Trailing 5 and 10 year Avg PE Versus Current PE

What Areas are PROJECTED to Grow in 2020

This is what analysts are PROJECTING/Forecasting (hence our coding for future review) for the year 2020!

Recent Losers are expected to be next years winners- i.e. Energy and Materials….

What happens if Tariff Agreements are not reached? Not being negative here but we must consider this could be better or worse!

11-9-19 Earnings Growth for 2020 by Sector - Forecast

Earnings Versus Market Price Movement

You hear us say all the time, Earnings are the ultimate driver of prices… and they are….

No one says this is easy…. Earnings have been flat, but markets up….

Theoretically this should not happen … UNLESS market participants expect future earnings growth as markets are forward looking.

Q 4 2019 EPS Growth Change Versus market Growth

How about the Consumer?

Recall the consumer drives over two thirds of the economy through spending in our consumer consumption economy….

A Happy Consumer = Spending Consumer

One of the many Consumer Sentiment Indicators… University of Michigan…

Steady as she goes!

9-2019 U of Michigan Sentiment 10 years

Ok … you get the point, not too bad!

We could find something really hot and really cold, but these are the biggies from a high level!

Of course we did not forget the inverted yield curve and it’s recession predictiveness … we spoke about it here, here, here and here…. more to come…

Have a Great “Lemur Checkup” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.

October 2017 Podcast Video, Financial Planning and Capital Market Update- By John Kvale

Here is our October 2017 Monthly review. If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast format.


October 2017 Video

Break In – D Magazine Honors – Best Wealth Managers

We are super happy to be honored in D Magazines Best Financial Planner and Wealth Managers Award !!

Thanks so much and congratulations to our fellow recipients.

9-27-17 FINAL DMAG Spread

11th Consecutive Honor – John Kvale Best Individual Financial Planner

The 11th consecutive D Magazine best Financial Planner award was also in this edition and we are super happy to announce, John received his 11th consecutive nomination!DmagLogo

Wow and again thanks to our fellow recipients!

Financial Planning Tip(s)-

Social Security Increase

Don’t smirk at 2%, every penny counts! With a CPI (Consumer Price Index) increase of 2% year over year, the Social Security Administration passed the good news on earlier this month. Take that 2% increase and run!


Capital Market Comments

Rates are Slowly Ticking Up

After much silence on interest rates, we have taken notice of recent movement as the global economy begins to pick up steam … Overseas seems to really be getting their act together.

10-24-17 10 Year Treasury

Consumer Sentiment Also Higher

The University of Michigan Consumer Sentiment hit a post “Great Recession” high this month.

With two thirds of our US Economy being based on consumer consumption, this bodes well for the Economy.

10-13-17 Consumer Sentiment

See you at the end of November, which also features our very special Blooper Thanksgiving Video from a few years ago!

Happy Fall Season!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.

December 2016 Podcast Video, Financial Planning Tip and Economic Review- By John Kvale

The year is over… Wow, was that fast or what? As regular readers know we do a monthly review. Starting with this video we are going to also have an emphasis on describing our updates for those Podcast listeners. So if you do not have the ability to watch the video, the Audio Podcast of this review will bring you up to date and fill you in well.

Let’s finish 2016 with our December Financial Planning Tip and Economic Review.. Here we go!

December 2016 Video


Financial Planning Tip –

Tax Tips and more

The best part of these tips are they can be done now in the year 2017 and help our 2016 tax pain….

  • SEP – Offsets 1099/Non W-2 Income
  • HSA – Deductions for high deductible Health plans
  • IRA – Oldie but a goodie-
  • Roth – Special purpose retirement vehicle
  • Itemize those Sales Taxes

Capital Market Movement

Everybody is happy?

We have spoken about the consumer and her role in pushing GDP (Gross Domestic Production) forward when happy… now take a look at investor confidence, again from our friends at Gallup…


Triple digits here we come ?  Time will tell!

Have a Great start to 2017!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
JK Street Cents Logo


Confidence … What Confidence? And less Hope?? …. Wait a Minute

Consumer spending currently makes up over two-thirds of GDP.  A happy confident consumer means good things to US economy in the form of growth/consumption.

Consumer Confidence Wanes

We watch the economic numbers closely, maybe too close at times.

While not sure why, the latest readings from the Conference Board (7/28/15)  were very weak.

7-28-15 Consumer Confidence

And future expectations/hope on the Economy were weak too!


7-28-15 Consumer Hope

Wait a minute, gas is cheap, the weather is good for the most part across the country, employment is up, interest rates are low, banks are lending, home prices are rising … Did they get an extra amount of grumpy callers on this survey?  We think it may be possible!

Fortunately there is a very similar reading, called the Michigan Consumer Sentiment, due out Friday …

Just in case it was not a one time incident, we are watching closely !

Have a Great Wednesday !

John A. Kvale CFA, CFP

PS If this is from the latest MINOR market pull back — well … let’s hope not!

8222 Douglas Ave # 590
Dallas, TX 75225

JK Street Cents Logo


How about that Santa Rally … Consumer Back? … From the Road …

When I mentioned a Santa Rally in the throes of lead balloon oil barrels, weak trading volume, and falling earnings estimates, “no guarantees” was a certain inclusion.

S&P 500 Santa Rally 12-22-14

One can almost see a sleigh going into the sky the last three days.  Fundamentals?  … shhh … tis the season, we can worry about that next year.

Checking In From the Road

Consumer confidence, comfort, and most important … SPENDING!

  1. Maybe I am in a unique part of the country
  2. Maybe it is the season
  3. Maybe this time its different? (Doubtful)

If not, the consumer is coming back and feeling more confident  … great news for spending and GDP (Gross Domestic Production – Measure of economic situation – about 2/3 consumer spending related.) More healing in the works.

Enjoy your Monday … From the Road!

John Kvale CFA, CFP

8222 Douglas Ave # 590
Dallas, TX 75225


September 2014 Review: Monthly Financial Planning Tip, Capital Market and Economic Overview

Welcome to our monthly Economic, Capital Market, and “hot off the presses” Financial Planning tip of the month. Once again a special thanks to all of  YOU … the best clients and friends as your experiences have again given us the subject matter for our Financial Planning Tip of the Month.

For those new to our writings, we touch on the most pertinent Economic and Financial “stuff” along with a video of my mug that has even more specialized details of the latest month as well as this post.

Let’s get going !

PSSST …. Hope you like our neat new intro to the video too!



You Tube Direct Link   or   Vimeo Direct Link

Itemize special items on Your Homeowners Insurance

  • Jewelry
  • Paintings/Art
  • Rugs
  • Any special/unusual valuable items

If you have anything out of the ordinary, check with your homeowners carrier to see if it needs to be itemized. Not to worry, in most cases the premium will not rise much if any, BUT if you forget to itemize and theft, destruction or a loss in incurred, you will be sorry.

Most carriers only ask you let them know you have something that needs itemized … if they do not know, they will most likely only pay a more normal relative fair market value of the item, possible far below the true value.

Ok, so you didn’t see our writings before the loss. It’s not all bad news, would you believe, you can deduct personal losses from your taxes ? Yep

Here is the IRS ruling, just be aware, there are certain hurdles you must jump … all worth jumping to help offset the pain of our loss with a tax deduction!

Too Strong US Dollar … huh ?

Don’t look now, but those claiming the end of the US Dollar as the world reserve currency have to think twice.

Why the strength?

  1. Russia/Ukraine conflict
  2. Broad weakness across the world EX USA
  3. More other countries currency falling than US strength

Chart of the US Dollar against a broad basket of world currencies

US Dollar Basket 9-30-14


  • Oil: denominated in US $,  downward pressure on price
  • Imports less expensive
  • Good time to travel abroad


  • VERY tough on exports(ers), less price competitive
  • Headwind for all non US countries
  • Tough for foreigners to buy, travel or spend here in US

It is not the TOTAL appreciation of the US currency, but the speed at which it happened … J.K. Financial, Inc.

 Average  Hourly Earnings

Today’s Top Economic Indicator

Avg Hourly Wage Growth

I am beginning to think this is one of the Holy Grail charts of our slow recovery. This recovery has been so slow to feel any pressure on wages, consumers are beginning to feel tapped out.

Consumer Confidence Drops Unexpectedly

Consumer Confidence 9-30-14

Because wages have not increased with inflation pressures, consumers are taking a pay cut. Consumer confidence is a driver of our economy.

Higher Consumer Confidence = Higher Spending (GDP 70% consumer) = Higher GDP

Keeping careful watch!

Have a Great Day!

John A. Kvale CFA, CFP
8222 Douglas Ave # 590
Dallas, TX 75225

5 Financial Positives This Week and Good Bye Q3 2011

In our Zig when others Zag “Friday Positive Fashion” we found many positives this week, so buckle up, and let’s review together:

Merkel the Muscle: AKA Angela Merkel, German Chancellor, flexed her muscles in the passing of a tough lower house vote to give greater support and power to the FSFC, an entity to help the EU countries solvency issues.

The First Trickle of Earnings Announcements looks ok: While we are very early in the earnings season AKA “90 day treadmill” our first look at company reports looks favorable. Our continued interest is how much the “lack of confidence markets” have seeped into investment decisions, both from a consumer level, and CFO level. So far so good !

Consumer Confidence Still Hanging In there: We view the lack of negative in consumer confidence as a positive. The longer we go without a major drop in confidence the better, in our opinion, as the initial dramatic market movements of early August become a memory. The longer term outlook also increased in this weeks Consumer numbers, leading to possible better times ahead.

Chicago PMI Surprises to Upside: Expectations for a 55 point reading on the Chicago area purchasing managers report were surpassed by an actual reading of 60.  In the strongest report since April of this year, the Chicago PMI report may be pointing to accelerating purchases and may bode well for the ISM Report of next week. A surprisingly positive report overall.

Steve Liesman breaks positive Euro report News (Video): Liesman, an economist and financial commentator on CNBC, broke the news that the EU was beginning talks on funding, targeted for struggling EU countries. The story was a huge positive as it appeared talks had begun to falter and countries were headed to their own corner to protect themselves. Capital markets greeted this breaking story with surprise and a Champaign party attitude.

Have a Good Weekend as we bid the third quarter of 2011 goodbye !