US Consumer Sentiment Index in October
According to the report provided by the University of Michigan, the University of Michigan Consumer Sentiment Index has risen to 100.7 so far in October 2017 compared to 95.1 in September. The October reading didn’t meet the preliminary market estimate of 101.1 but was the strongest reading since January 2004.
The stronger improvement in US consumer sentiment suggests that consumers’ view on the US economic outlook improved significantly. The index is at a 13-year high.
Various factors supported the movement of this index such as the unemployment rate hitting a 16-year low, new highs in the equity market (SPY), a strong rebound in economic growth, and strong hopes for various reforms in the economy (QQQ) (IWM). Richard Curtin, the director of the University of Michigan consumer survey, said, “indeed, nothing in the latest survey indicates that consumers anticipate an economic downturn anytime soon, which contrarians may consider a clear warning sign of trouble ahead.”
S&P 500 performance
The S&P 500 Index (SPY) is making record highs day by day. As consumers are an important part of the economy, the improvement in its activity is a positive sign both for the economy and for the market. Recently, billionaire investor Dan Loeb said that he is bullish on the US stock market. He also believes that this market rally will continue in the near future.
In the next part of this series, we’ll look at the indicators that investors should watch next week.