Consumer Confidence Shines in America
- CB Consumer Confidence released
- Richmond Manufacturing Index also out
- US still looks strong, as long as coronavirus can be contained
Early during the New York session on Tuesday, the Consumer Board Consumer Confidence Index was released, which is a survey of 5000 households. Respondents were asked to rate the relative level of current and future economic conditions, including employment opportunities, business conditions, and the overall economic situation in the United States.
It is considered to be a leading indicator of just how willing people in the US may be to spend money, which of course will have a knock-on effect on the rest of the economy.
Announcement much better than expected
The announcement during the Tuesday session showed a much better than anticipated figure in the form of 131.6, as opposed to the 128.2 anticipated. Furthermore, the previous month was revised upward from 126.5 to 128.2. The indicator should prove to be good news for Wall Street, and it should further reinforce whether the US economy continues to power forward.
That being said, the latest drama du jour, the coronavirus, is not factored into this announcement. Regardless, it shows the underlying strength of the United States, which continues to look relatively good based on consumer demand.
After all, consumption is over 70% of the US economy, so it gives you an idea of how the US should perform. It is still the strongest economy in the world, and that should continue to help boost United States stocks going forward, after this most recent pullback.
Furthermore, the Richmond Manufacturing Index came out at 20, which was extraordinarily bullish considering that the anticipated figure was -3. This shows that the mid-Atlantic region of the United States continues to see growth, and it looks as if consumption overall will continue to lift the American economy.
US to continue to outperform its peers
Looking ahead, it appears that the US economy will continue to outshine several other ones around the world. That should help boost Wall Street and possibly even the US dollar if other economies can’t get it together.
That being said, the FOMC statement comes out during the trading session tomorrow, and it will have drastic effects on the value of the US dollar as well as the stock markets. It’s very likely that the money flow around the world will continue to head towards New York and away from places like Frankfurt and Shanghai.
Going forward, this should benefit retail stocks in America as well as industrials, as the manufacturing sector looks very strong. Stock markets faced a short-term panic, but if the coronavirus can be contained, it should continue to favor Wall Street over the next several months.