June 18—more good news for consumer sector investors
June 18 had more good news for investors in the US consumer sector. The sector rose. It’s gauged by the Consumer Discretionary Select Sector SPDR ETF (XLY). XLY rose 1.21%, while the SPDR S&P Retail ETF (XRT) rose 0.98%. XLY and XRT have returned 8.07% and 4.99% YTD (year-to-date).
Bloomberg CCI rebounds to 40.9
The Bloomberg CCI (Consumer Comfort Index) is a weekly indicator produced by Langer Research Associates of New York. It tracks Americans’ views on the condition of the US economy, their personal finances, and the buying climate.
The index is based on a four-week moving average of 1,000 responses. The percentage of households with negative views on the economy, personal finances, and buying climate is subtracted from the share with positive outlooks. Then, the difference is divided by three. The results can range from 100 to -100. A reading of 100 indicates that every participant in the survey had a positive response to all three of the components. A reading of -100 signals that all of the views were negative.
Consumers were more comfortable in the week ending June 14
The index level was 40.9 for the week ending June 14, gaining 0.8 points from last week’s 40.1. The CCI rose again, after falling for two consecutive weeks.
The Bloomberg CCI provides important clues about consumer behavior. It gives an outlook at the direction of consumer spending. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. It’s easy to see how this index gives insight to the direction of the economy.
While investors in the consumer sector had a reason to rejoice on June 18, investors in the industrial sector also saw some positive light. We’ll discuss this in the next part of the series.