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US consumer sentiment hits 11-year high, good for casinos

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US consumer sentiment 

The US consumer sentiment is tracked by the Consumer Sentiment Index (or CSI). CSI measures the level of consumer confidence in the United States and is an important indicator for investors, retailers, and economists. The index rises when consumers gain confidence in the economy.

Thomson Reuters and the University of Michigan publishes the Consumer Confidence Index every month. The final reading on the overall index of consumer sentiment stood at 98.1 in January 2015, up from 93.6 in December 2014. This is the highest reading on a final basis since January 2004.

Improving the job market with better security and lower gasoline prices continues to improve consumer sentiment. A surge in the consumer confidence level means US consumers expect better economic growth and rising incomes in the coming months.

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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, including Las Vegas Sands (LVS), MGM Resorts (MGM), Wynn Resorts (WYNN), and Penn National Gaming (PENN). It’s also positive for the VanEck Vectors Gaming ETF (BJK), which has ~25% exposure to these companies. The Consumer Discretionary Select Sector SPDR Fund (XLY) has ~1% exposure to these casino stocks.

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