US consumer sentiment
In the US, consumer sentiment is tracked by the CSI (Consumer Sentiment Index). It measures the level of consumer confidence in the US. It’s an important indicator for investors, retailers, and economists. The index rises when consumers gain confidence in the economy.
The CSI is reported on a monthly basis—by Thomson Reuters or the University of Michigan. The final reading on the overall CSI was 88.80 in November 2014—up from 86.90 in October 2014. This is the highest reading on a final basis since July 2007.
An improving job market with better security and lower gasoline prices continues to improve consumer sentiment. A surge in consumer confidence levels means that US consumers expect better economic growth and rising incomes in the coming months.
In the US, consumer confidence averaged 85.06 from 1952 to 2014. It peaked at an all-time high of 111.40 in January 2000. Its all-time low was 51.70 in May 1980.
Consumer confidence and casinos
Improving consumer sentiment usually indicates increasing incomes due to a better job market. It indicates growth prospects for the overall economy. This is positive for casino stocks—like Las Vegas Sands (LVS), MGM Resorts (MGM), Wynn Resorts (WYNN), and Caesars Entertainment (CZR). It’s also positive for ETFs—like the VanEck Vectors Gaming ETF (BJK) and the Consumer Discretionary Select Sector SPDR Fund (XLY). These ETFs invest in leisure stocks.
In the next part of this series, we’ll discuss why disposable income drives the demand for casinos.