With a business cycle that is very long in the tooth… We are closely watching the biggest part of the economy, the consumer.
As the economic cycle ages, sentiment may wane .. looking at this chart going back the last several years, sentiment appears to be gaining steam.
Could the 07-09 cycle have been so deep and so slow to recover that we are just now picking up steam? Time will tell !
Have a Great “Good Sentiment” Day!
John A. Kvale CFA, CFP
October whisked by quickly from our perch, as they seem to be doing lately, especially this time of the year. Looking back, there were major events for review, so here we go:
Fortunately or unfortunately, depending on your optimism, we have had enough political saber-rattling lately that a government shut down hardly fazed the capital markets. Markets continue to ride the wave of government stimulus with very little pause. As we have mentioned there are no steals in the US Capital Markets today, however earnings can grow into their valuations … eventually!
This is an Hourly October Chart
We are not certain how much the government shut down affected the economic data as well as consumer sentiment, no matter the economic data is pointing to a slowing across the board. This is being viewed positively by the Capital Markets as a continuance of the stimulus. Bad news is good, so to speak.
Note the continued fall off in hiring near the tail end of this chart. Caution is advised, not fear yet, but not a time to be extremely bold … we are watching closely.
Oddly enough, Consumer sentiment was/has been more affected by the Government shut down than the afore-mentioned capital markets. Again, caution, not fear, but this could lead to shorter lines for the holiday season. Consumers make up almost 2/3rds of GDP, such the reason for follow.
With leprechaun luck of attending an event with current Dallas Federal Reserve Chairman, Richard Fisher, we enjoyed his more Hawkish views which are similar to ours. Hawks tend to favor less stimulus. Much of the event was focused on the government shut down, which as we all know is … “yawn” ….old news now, but his quote of “Do not test markets” sticks in our minds. Again, more on this in our next newsletter but a lasting impression was left.
CEO Dallas Federal Reserve
Next Up, November … Thanks for reading/viewing … Watch out Turkeys!
Have a Great Day!
John Kvale CFA, CFP
http://www.jkfinancialinc.com http://www.street-cents.com 8222 Douglas Ave # 590 Dallas, TX 75225In addition to being a summer Friday away from major earnings season, and without any heavily followed economic reports other than consumer sentiment (see chart below from Econoday), today marks the expiration of four types of derivative contracts, or “Witches”
Single Stock Options and Futures, Index Options and Futures.
As we have been written about in our latest newsletter (more coming soon) these derivates contracts, while very useful, have unique characteristics and have grown greatly in popularity over the last few years, leading to more impactful movement on all areas of the capital markets.
It is a good idea to remember if an investor is making transactions today, additional caution may be advised as the “Four Witches” may create unique movements in various areas of the markets.
Consumer Sentiment: Latest results for June 2011 due at 8:55 AM Central
Have a Great Day!
JK
Comments Off on Be Careful Out there; Quadruple Witching and Summer Days
Posted in Investing/Financial Planning, Market Comments
Tagged Consumer Sentiment, Quadruple Witching
Consumer Sentiment hits a new post Great Recession high
The University of Michigan Survey of Consumer Sentiment publishes one of several consumer sentiment indicators.
Consumer Sentiment
With a domestic economy that relies about 66% on consumer spending, a happy consumer is good for the economic outlook.
From Michigan Survey of Consumer Sentiment October 2017 update
Looking longer term, this is not an ALL TIME high, but still on the positive side.
Have a Positive Sentiment day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com
Share this:
Like this:
Leave a comment
Posted in Economy, Investing/Financial Planning, Market Comments
Tagged Consumer Sentiment, University of Michigan, University of Michigan Consumer Survey