All investors are consumers, but not all consumers are investors.
The September installment of University of Michigan's Consumer Sentiment Survey reported Americans are feeling pretty optimistic. Consumer sentiment rose to the second highest level since 2004, and consumer expectations reached the highest level since 2004. Surveys of Consumers chief economist, Richard Curtin, wrote:
"Consumers anticipated continued growth in the economy that would produce more jobs and an even lower unemployment rate during the year ahead...The largest problem cited on the economic horizon involved the anticipated negative impact from tariffs. Concerns about the negative impact of tariffs on the domestic economy were spontaneously mentioned by nearly one-third of all consumers in the past three months, up from one-in-five in the prior four months."
Investors weren't as optimistic, according to the American Association of Individual Investors (AAII). Last week, the AAII Investor Sentiment Survey reported bullish sentiment dropped more than 10 percentage points. The results were:
- Bullish 32.1 percent of respondents (historic average: 38.5 percent)
- Neutral 35.1 percent of respondents (historic average: 31.0 percent)
- Bearish 32.8 percent of respondents (historic average: 30.5 percent)
Despite the apparent shift in investor attitudes, stock markets moved higher last week. Vito J. Racanelli of Barron's wrote:
"The stock market radiated confidence this past week, finishing about 1 percent higher despite choppy action. There was a plethora of good economic news - from lower-than-expected inflation to sky-high business and consumer confidence numbers - that drove shares up. Not even a ratcheting up of tough tariff talk Friday on the part of the U.S. could dampen investor enthusiasm for long."
Some believe the AAII Sentiment Survey is a contrarian indicator. Last week, that may have been the case.
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Data as of 9/14/18
|
1-Week
|
Y-T-D
|
1-Year
|
3-Year
|
5-Year
|
10-Year
|
|
Standard & Poor's 500 (Domestic Stocks)
|
1.2%
|
8.7%
|
16.4%
|
14.2%
|
11.3%
|
9.3%
|
|
Dow Jones Global ex-U.S.
|
1.4
|
-6.8
|
-2.3
|
5.9
|
1.8
|
2.1
|
|
10-year Treasury Note (Yield Only)
|
3.0
|
NA
|
2.2
|
2.2
|
2.9
|
3.5
|
|
Gold (per ounce)
|
0.3
|
-7.3
|
-9.3
|
2.9
|
-1.9
|
4.5
|
|
Bloomberg Commodity Index
|
-3.3
|
-6.5
|
-3.1
|
-2.4
|
-8.6
|
-7.1
|
|
DJ Equity All REIT Total Return Index
|
0.2
|
3.6
|
4.5
|
10.7
|
9.9
|
8.6
|
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron's, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
