Consumer Comfort eased in the US, offset XLY’s gains
The consumer sector tracking Consumer Discretionary Select Sector SPDR ETF (XLY) ended flat on Friday, July 24. Positive consumer sentiments around the steep fall in jobless claims data, covered in Part 3, were offset by a fall in the consumer comfort level for the week ending July 19 in the US (IVV). The news, in the form of the latest figures from the Bloomberg Consumer Comfort Index, suggests that consumer comfort is easing.
Consumer sector companies like TrueCar (TRUE), TripAdvisor (TRIP), Expedia (EXPE), and Johnson Controls (JCI) fell at the close of trade on Friday. They fell 35.67%, 13.40%, 3.49%, and 4.53% at the close of trading on July 24. These companies have yielded -70%, 8.30%, and 23.83% YTD (year-to-date).
Bloomberg CCI eases to 42.3
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 19
The index level was 42.4 in the week ending July 19—a fall of 0.8 points from last week’s 43.2. The index is down for the third 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.
On July 23, the Conference Board came out with the June estimate for the leading economic index. Let’s take a look.