Latest news with #ExpectationsIndex
Fibre2Fashion
5 days ago
- Business
- Fibre2Fashion
Expectations improve, US consumer confidence hits 97.2 in July: TCB
US consumer confidence showed a modest improvement in July, with The Conference Board's (TCB) Consumer Confidence Index rising to 97.2 from a revised 95.2 in June. While the overall index ticked up by 2 points, the underlying picture remained mixed. US consumer confidence rose to 97.2 in July from 95.2 in June, driven by improved expectations despite mixed views. The Present Situation Index dipped, but the Expectations Index climbed to 74.4. Optimism grew among over-35s and Republicans. Fewer consumers expect rate hikes, though credit card rates may rise. Recession fears eased slightly but remain elevated. The Present Situation Index, reflecting consumers' views on current business and labour market conditions, fell slightly to 131.5, whereas the Expectations Index—which measures short-term outlook for income, business, and employment—rose by 4.5 points to 74.4. Despite the gain, expectations remained below the recession-warning threshold of 80 for the sixth consecutive month. The increase in confidence was primarily driven by consumers aged over 35 and spanned most income groups, except the lowest bracket of households earning under $15,000 annually. Confidence rose among Republican respondents, while it held steady among Democrats and Independents. At the same time, fewer consumers now expect interest rates to rise, and more anticipate they may fall, though credit card rates are widely expected to climb further. Consumers' financial sentiment remained relatively steady but softened slightly in July. Views on current and future family finances deteriorated modestly, and while recession expectations declined slightly, they remained elevated compared to 2024 levels. Purchasing plans showed caution, TCB said in a release. Consumers' views on the current economy offered a mixed picture. Assessments of current business conditions were slightly more favourable, with 20.1 per cent describing conditions as 'good,' down marginally from 20.5 per cent in June, and 14.3 per cent calling them 'bad,' down from 15 per cent. Labour market sentiment cooled: 30.2 per cent said jobs were 'plentiful,' up from 29.4 per cent, but 18.9 per cent said jobs were 'hard to get,' up from 17.2 per cent. Expectations for the next six months showed slight optimism. 18.4 per cent of consumers expected business conditions to improve, up from 17.1 per cent, while the share expecting worsening conditions fell to 23.3 per cent from 24.8 per cent. Similarly, 17.5 per cent expected more jobs to become available, up from 15.9 per cent, while 25.4 per cent anticipated fewer jobs—slightly down from 25.7 per cent. Income expectations were also more upbeat, with 18.2 per cent expecting a rise, up from 17.6 per cent, and 12 per cent anticipating a decline, down from 12.9 per cent. Fibre2Fashion News Desk (HU)
Yahoo
6 days ago
- Business
- Yahoo
Bottom Line Undercuts Hot Quarter for Top-Line US GDP
When a car's engine runs hot, it's best to take a look under the hood. When the country's economic engine does the same, peek at the underlying data. US gross domestic product grew at an annualized rate of 3% in the second quarter, the Commerce Department said Wednesday, a seemingly white hot turnaround from 0.5% in the first three months of the year. Economists anticipated a 2.5% rate, so the better-than-expected top-line figure was cause for celebration, right? READ ALSO: Big Tech Pulls Off a Very Big Earnings Week and Barnburner Figma IPO Offers Good Omen as Klarna Reconsiders Debut Don't Ignore the Core As ING Chief International Economist James Knightley noted Wednesday, the primary driver of growth in the second quarter was net trade whiplash. In the first quarter, companies went into overdrive importing as much as they could to beat President Donald Trump's tariffs. In the second quarter, those elevated import rates came crashing down. 'This meant that net trade contributed 5pp to the headline growth rate, but a run-down in inventories, as companies put their first-quarter imports to work, subtracted 3.2pp,' he wrote. That sort of dramatic trade reversal is not going to be a constant phenomenon, which is why analysts and investors looked especially closely at underlying data points. Take consumer spending — just 70% of the US economy, no big deal: On Tuesday, the Conference Board released its latest Consumer Confidence Survey, a closely watched gauge of Americans' financial attitudes. Among the data, the all-important Expectations Index, which measures how consumers view the short-term outlook for income, businesses and the job market, rose 4.5 points to 74.4, but that left it below the threshold of 80 that historically signals a recession in the next 12 months, for the sixth straight month. The underlying data from the Commerce Department released Wednesday aligned with the less rosy picture: Core GDP, which strips out volatile economic activity like inventory changes and net exports to give a better view of consumer spending and private sector investment, slowed in the second quarter to an annualized 1.2% rate from 1.9% a year earlier. Many economists consider core GDP a better indicator of the economy's health, and it registered the weakest since the fourth quarter of 2022. Nationwide Chief Economist Kathy Bostjancic put it succinctly in a note Wednesday: 'Headline numbers are hiding the economy's true performance, which is slowing as tariffs take a bite out of activity.' The S&P 500 taking a minor 0.1% dip on Wednesday suggests markets are taking the underlying signals seriously. No Reservations: Ridiculed by President Trump as a 'numbskull' and a 'moron' for not cutting interest rates, Federal Reserve Chairman Jay Powell and his colleagues on the central bank's monetary policy committee left rates unchanged on Wednesday for the fifth straight meeting. But two governors broke ranks in a 9-2 vote, siding with Trump's demands to lower rates and marking the first time there have been multiple dissents since 1993. On top of that, Fed officials downgraded their fiscal outlook, reasoning that 'economic activity moderated in the first half of the year' in a hint they're not far off from agreeing on interest rate cuts. Annex Wealth Management's Brian Jacobsen wrote they could soon regret that: 'The Fed probably wishes it waited until next Wednesday to have this meeting so they could have the employment numbers [scheduled for release Friday] to look at. It's setting up to be an awful lot like last year when, in hindsight, they wished they'd have cut in July and so they did a catchup cut in September.' This post first appeared on The Daily Upside. To receive delivering razor sharp analysis and perspective on all things finance, economics, and markets, subscribe to our free The Daily Upside newsletter. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
7 days ago
- Business
- Miami Herald
Fed decision resets September interest rate cut bets
There's been a lot of debate this year over the Federal Reserve's decision to leave interest rates unchanged. Those who favor Fed Chair Jerome Powell cutting interest rates say the risk that tariffs will cause inflation is overblown, and threats to the job market are more important. Opponents say it's too soon to say inflation won't spike because of tariffs and that recent economic data show unemployment is manageable. There's little debate, however, that we've seen sticky inflation and that cracks in the jobs market have appeared. Don't miss the move: Subscribe to TheStreet's free daily newsletter The Consumer Price Index showed inflation was 2.7% in June, matching inflation in November, and up from a low of 2.3% in April. Meanwhile, job losses have picked up in 2025, including layoffs associated with the Department of Government Efficiency's efforts this spring. The uncertainty over whether inflation or unemployment should be the Fed's focus has planted it firmly on the sidelines, causing the market to push out odds of rate cuts further as the year has progressed. That kick-the-can trend continues following the Fed's decision to leave rates unchanged again on July 30. Image source:Gross Domestic Product, or GDP, measures economic activity. It looked pretty bleak this spring when the advance first-quarter GDP estimate showed the U.S. economy contracted 0.3%, according to the Bureau of Economic Analysis. The slip in GDP was blamed mainly on companies pulling forward imports to sidestep President Donald Trump's newly instituted tariffs and a ramp in gold trading following his election. Related: Federal Reserve meeting targets interest rate cut Combined with companies reporting 275,240 job cuts in March, up 205% year over year, and tariff risks, many economists and market participants began fearing stagflation, a period of rising inflation and stagnant economic activity, or worse, an outright recession. In that scenario, hesitancy at the Fed could lead to it falling so behind the curve that it would have to cut drastically to get the U.S. economy back on track. While economic risks remain, the data since then has been more encouraging, making it less likely that the Fed's pause on rate cuts will result in it being caught offside. Consumer confidence, which had tanked this spring to its lowest level since 2011, has rebounded. The Conference Board's Expectations Index, which had plummeted to 54.4, recovered to 74.4 in July. Meanwhile, according to the advance estimate for second-quarter GDP, the U.S. economy returned to growth, rising 3%. There's also been a deceleration in job losses. U.S. employers announced 47,999 job cuts in June, down 49% from May and 2% lower than last year, according to Challenger, Gray, & Christmas. There were 247,256 job losses in the second quarter, the most in a Q2 since 2020. Still, the retreat in layoffs in June is encouraging. More Economic Analysis: GOP plan to remove Fed Chair Powell escalatesFederal Reserve official gives green light to July rate cutTrump deflects reports on firing Fed Chair Powell 'soon'Former Federal Reserve official sends bold message on 'regime change' Consumer confidence, GDP, and the jobs market data could suggest that the Fed is right to keep its finger off the rate cut trigger. After all, the Fed's dual mandate is low inflation and unemployment, two often contradictory goals. When the Fed raises rates, the economy slows, causing job losses but reducing inflation. When it cuts interest rates, the economy accelerates, leading to job growth but increasing inflation. Absent clarity on which is worse, inflation or unemployment, there's little incentive for the Fed to risk making a decision that creates more problems than it solves. "Economic growth really was not that strong, but the headline print made it look so. That was enough for Powell and company to sit on their collective hands and punt the football into September," wrote veteran analyst Stephen Guilfoyle on TheStreet Pro. The possibility of interest rate cuts has remained in play this year, with the Fed itself saying in its closely watched dot-plot that it expected two rate cuts by the end of 2025 in June. The dot-plot wasn't updated for the July meeting (we'll have to wait until September for that), but Chairman Powell's comments didn't do much to embolden those hopeful that the first of those cuts could happen at September's meeting. Related: Warren Buffett's Berkshire Hathaway predicts major housing market shift soon "The [Jerome Powell] press conference was quite hawkish," wrote Peter Tchir on TheStreet Pro. "Powell seemed to drive home the message that 'tariffs are slow-moving in terms of inflation, but inflationary nonetheless.' That aligns with my view, that it takes months, maybe even quarters before the inflation effects hit." Powell stuck to his guns throughout the press conference, doubling down on previous statements that any future interest rate cuts would hinge on the data, rather than anything else. Ostensibly, that's been a knock on President Trump's ongoing criticism of Fed policy and Powell himself. The president has referred to Powell as "Mr. Too Late" and a "numbskull" for leaving rates unchanged. He reiterated his displeasure following the Fed meeting, calling Powell "Too Late, and actually, too angry, too stupid, & too political, to have the job of Fed Chair" in a post on Truth Social. Powell explained holding the line on rates in his press conference, saying current policy is "modestly restrictive" and the economy is in a "solid position." He conceded that tariffs' impact on inflation could prove short-lived, though. Nevertheless, the absence of a more evident tilt toward lower rates soon squashed optimism that interest rates would be cut in September. According to the CME's closely watched FedWatch tool, the probability of the Fed cutting the Fed Funds Rate in September dropped to 39% after the Fed decision, from 58% one week ago and down from 75% one month ago. Odds interest rate cuts will reduce the Fed Funds Rate by a quarter percent to a range of 4% to 4.25% in October, also shifted. CME data suggests a 38% probability that interest rates will remain unchanged at the current 4.25% to 4.50% level in October, up from 1% last month. Unsurprisingly, Treasury yields fell, with the 10-year Treasury Note declining two basis points to 4.36% on July 31, and down from 4.42% on July 28. Related: Legendary fund manager has blunt message on 'Big Beautiful Bill' The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Fibre2Fashion
01-07-2025
- Business
- Fibre2Fashion
US Consumer Confidence Index drops sharply in June 2025: TCB
US consumer confidence declined significantly in June 2025. The Conference Board (TCB) Consumer Confidence Index fell by 5.4 points to 93, reversing nearly half of May's strong gains. Both the Present Situation Index and the Expectations Index showed broad-based deterioration, reflecting growing pessimism about current conditions and the near-term outlook. The Present Situation Index, which gauges consumers' assessment of current business and labour market conditions, dropped 6.4 points to 129.1. Meanwhile, the Expectations Index, which captures short-term outlooks for income, business, and employment, declined by 4.6 points to 69—well below the 80-point threshold that typically signals a recession ahead, as per data by The Conference Board. US consumer confidence fell in June 2025, with The Conference Board Index dropping 5.4 points to 93. Both present and future outlooks weakened, with the Expectations Index plunging to 69, signalling recession risks. Pessimism grew about job prospects, business conditions, and income expectations. Inflation and tariffs remained top concerns, though inflation fears slightly eased. 'Consumer confidence weakened in June, erasing almost half of May's sharp gains,' said Stephanie Guichard, senior economist, Global Indicators at The Conference Board. 'The decline was broad-based across components, with consumers' assessments of the present situation and their expectations for the future both contributing to the deterioration. Consumers were less positive about current business conditions than May. Their appraisal of current job availability weakened for the sixth consecutive month but remained in positive territory, in line with the still-solid labour market. The three components of the Expectations Index—business conditions, employment prospects, and future income—all weakened. Consumers were more pessimistic about business conditions and job availability over the next six months, and optimism about future income prospects eroded slightly.' Consumer sentiment towards current business conditions worsened, with 19 per cent describing them as good, down from 21.4 per cent in May, while those saying conditions were bad rose to 15.3 per cent. Views on the labour market also cooled, with the share of respondents stating jobs were 'plentiful' dropping to 29.2 per cent. Future expectations further darkened in June. Only 16.7 per cent of consumers anticipated business conditions would improve, while 24 per cent expected them to worsen. Expectations for job availability also dipped, with 15.4 per cent expecting more jobs—down from 18.6 per cent. Income expectations followed a similar trend, with just 16.3 per cent expecting higher incomes in the months ahead. Despite the gloomier outlook, consumers' assessments of their current and expected family financial situations remained resilient. However, the perceived likelihood of a US recession over the next year stayed elevated. 'Consumers' write-in responses revealed little change since May in the top issues impacting their views of the economy. Tariffs remained on top of consumers' minds and were frequently associated with concerns about their negative impacts on the economy and prices,' added Guichard. 'Inflation and high prices were another important concern cited by consumers in June. However, there were a few more mentions of easing inflation compared to last month. This is in line with a cooling in consumers' average 12-month inflation expectations to 6 per cent (down from 6.4 per cent in May and 7 per cent in April). References to geopolitics and social unrest increased slightly from previous months but remained much lower on the list of topics affecting consumers' views.' Fibre2Fashion News Desk (SG)
Miami Herald
30-06-2025
- Business
- Miami Herald
Veteran analyst updates S&P 500 prediction after record rally
How high could stocks go? That's the question most investors are asking after the S&P 500 and Nasdaq Composite have delivered mouth-watering gains since President Donald Trump paused reciprocal tariffs on April 9. The S&P 500 has marched 24% higher, without much of a pause, while the technology-heavy Nasdaq Composite, which is weighted heavily toward the Magnificent 7, has climbed over 33%. Don't miss the move: Subscribe to TheStreet's free daily newsletter Those returns are impressive, especially considering that the S&P 500's average annual return since 1957 is about 10%, and the market was flirting with bear market territory only a little over two months ago. Stocks' rapid recovery isn't uncharted territory, though. The market has experienced sharp drops in the past, and how the S&P 500 performed after those declines may offer insight into how much gas for stocks may be left in the proverbial tank. Longtime veteran Wall Street analyst Sam Stovall, who has been navigating stocks for decades, recently offered thoughts on how the rest of the year may play out. There have been plenty of reasons to worry that stocks could tumble in 2025 amid a weakening economy, including: Sticky inflationDeclining GDP growthGrowing unemploymentLackluster confidence Inflation is down substantially from its 8% plus peak in 2022, but progress lately has been limited. The Personal Consumption Expenditures (PCE) index showed core inflation, excluding volatile energy and food prices, rose 2.7% in May. That was up from 2.6% in April and matched the rate from last September. Related: Morgan Stanley reboots stock market forecast after rally Many think the inflation picture will worsen in the coming months. Since February, President Trump has implemented 25% tariffs on Canada, Mexico, and autos, plus a 30% tariff on China and a 10% baseline tariff on all imports. Given that so much of what we buy, from clothing to electronics, is made overseas, many think businesses will pass along at least some of these higher costs to consumers this year. The prospect of higher prices isn't welcome news for already cash-strapped consumers and businesses, who may retrench spending, slowing our economy. There's already some evidence that economic activity is in trouble. First-quarter GDP declined 0.5%, and the World Bank estimates that full-year GDP in the U.S. will be just 1.4%, down from about 2.8% last year. The situation has led to an uptick in layoffs, which has increased the unemployment rate. Over 696,000 workers have been laid off through May, up 80% year over year, according to Challenger, Gray, & Christmas. The unemployment rate is 4.2%, up from its low of 3.4% in 2023. Risks that inflation reasserts itself and unemployment increases have taken a toll on consumer confidence. While confidence is better than in April, the Conference Board's Expectations Index is 69, handily lower than the 80 that often indicates a looming recession. Nevertheless, the stock market is forward looking, and since April, investors believe the worst of the risks are behind us and arguably got priced into stocks when they nose-dived this spring. Sam Stovall is a been-there-done-that Wall Street veteran analyst. He's built a long career analyzing the markets, including serving as managing director and chief investment strategist at S&P Global for over 27 years, before becoming chief investment strategist for CFRA, a major research firm. Related: Rare event could derail S&P 500 record-setting rally Stovall has a reputation for connecting the dots between the past and the present. He considered past sharp sell-offs and what happened after them and came away bullish. "The recent correction recovered all that was lost in only 80 calendar days, versus the traditional 236 days for all 25 corrections (declines of 10.5% to 19.9%) since WWII," said Stovall in a note to clients. "Investors shouldn't be too surprised by this speedy recovery, due to the swiftness of the initial selloff." The V-shaped recovery after the dramatic drop reflects a market that had become very oversold, very quickly. The baskets that have performed best since April's low have perhaps, unsurprisingly, been the groups that got hit the hardest. For example, the information technology sector, which comprises high flyers like Nvidia, is up 41% from the lows. The average return for the three worst-performing sectors - information technology, consumer discretionary, and communication services - is up 32%. More Wall Street Analysts: Analysts reboot Olive Garden parent's stock price targets as earnings loomAnalysts revamp forecast for Nvidia-backed AI stockIntuitive Surgical analyst raises eyebrows with new stock price target Those gains could continue, says Stovall, but he did offer a relatively tempered outlook for the third quarter. "The S&P 500 posted the weakest quarterly return, eking out only a 0.1% advance in Q3," said Stovall. "Five of its 11 sectors posted declines, led by communication services, consumer discretionary, energy, and materials." The third quarter's lackluster historical returns could mean it's a bit tougher sledding for stocks short term, but Stovall still thinks that stocks overall can deliver bigger returns through year's end. "Encouragingly, history indicates that quick drops to the -10% threshold typically result in a shorter and shallower total decline, followed by a more rapid recovery," said Stovall. "As a result, investors look forward to continued gains of between 6% and 10%, as was typically the case following declines of up to 20% since WWII, before slipping into a new decline of 5% or more; they just have to survive the traditionally challenging third quarter." Related: Analyst sends alarming message after S&P 500 hits all-time high The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
