Consumer comfort eased in the US, offsetting XLY’s gains
The Consumer Discretionary Select Sector SPDR ETF (XLY) gained 0.36% on Thursday, July 30, despite consumer comfort easing in the week ended July 26. Consumer sentiments around the rise in jobless claims, covered in part 3 of this series, and the fall in consumer comfort weren’t enough to keep the consumer sector ETF from rising.
Consumer sector companies like Mondelez International (MDLZ), Michael Kors (KORS), and Netflix (NFLX) ended high on Thursday, July 30. They gained 5.03%, 5.01%, and 4.18% at the close of trading on July 30. The SPDR S&P Retail ETF (XRT) was also up 0.66%.
Bloomberg CCI eases to 40.5
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 the 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.
Consumer comfort eased in the week ending July 26
The consumer comfort index level was 40.5 in the week ending July 26, a fall of 1.9 points from last week’s 42.4. The index is down for the fourth consecutive week.
The Bloomberg CCI provides important clues about consumer behavior. It gives an outlook for 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.