United States Releases Mixed Economic Figures on Tuesday

Alan Penny

26 November 2019

3 min read

dollar notes under US flag

  • CB Consumer Confidence
  • Richmond Manufacturing Index
  • New Home Sales

The United States released mixed economic figures on Tuesday across a handful of different sectors. The market in the US is currently under a microscope as a kind of indicator to gauge the temperature of the rest of the world.

Globally, the market has been softening lately, while in the United States it has been a bit of a standout. Parsing the numbers in the US can give traders the idea of whether or not the global markets are likely to recover.

The announcements

The Consumer Board Consumer Confidence figures came out for the month of October with a reading of 125.5. This is lower than the 126.9 figure expected and it will attract a certain amount of attention, as over 70% of the US economy is driven by consumption.

If the US consumer figure drops off, that will have negative rippling effects well beyond the US borders and into various economies around the world. This includes China, which is also dealing with the China-US trade situation.

it’s more about “passive investing” than individual selection

New Home Sales came out at 733,000 added during the previous month. That is a very bullish sign for the housing market in the United States, as it was anticipated to produce only 708,000 new sales. Furthermore, the previous month was revised upward from 701,000 to the increased 738,000 figure. This, of course, has a large domino effect across the United States economy, as so much of it is tied to housing, be it credit or perhaps other such parts of the economy, such as furniture and contractors.

The Richmond Manufacturing Index came in at -1, which is much lower than the anticipated reading of 6. This is in sharp contrast with the bullish Empire Manufacturing Index, showing just how uneven the economy is in the United States.

Currently, the market is very likely to see the United States as bullish, but it is probably going to be one of the situations where it’s more about “passive investing” than individual selection, which will be very difficult.

There are a handful of clear winners in the United States such as Apple, Facebook, and the like. But at this point, it’s probably much easier to simply buy the index following ETFs, as most have been doing for years.

The main takeaway

The main takeaway is that the United States remains positive but very much a mixed bag. At this time, the market is very likely to continue to see a lot of volatility, but things are still in a mess. So, one should expect that we will continue to see volatility and concern.

While the United States can simply hold on for a while, the rest of the world may join the party and we may have another leg higher when it comes to risk appetite. If we were to break down as far as economic figures are concerned in the US, that could send everything else into a downward spiral.

Written By
Alan Penny

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