Consumer comfort fell for the fifth week in a row
The Consumer Discretionary Select Sector SPDR ETF (XLY) fell 1.36% on Thursday, August 6. Consumer comfort fell further in the week ending August 2. Consumer sentiments around the rise in jobless claims, covered in Part 2 in this series, and the fall in consumer comfort caused XLY to fall on August 6.
Consumer sector companies like Keurig Green Mountain (GMCR), Viacom (VIAB), and 21st Century Fox (FOXA) ended low on Thursday, August 6. They fell 29.75%, 14.22%, and 6.42% at the close of trade on August 6. The SPDR S&P Retail ETF (XRT) also fell 1.97%.
Bloomberg CCI eases to 40.3
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 August 2
The CCI level was 40.3 in the week ending August 2—a fall of 0.3 points from last week’s 40.5. The index fell for the fifth 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 personal finances, the more likely they are to spend.
Meanwhile on the European side, the factory orders report from Germany gave good reason for investors in European equity to be confident about their holdings.