US Consumer Inflation Expectations Hit 2-Year Low, New York Fed Survey Reveals
Portfolio Pulse from Piero Cingari
The New York Fed's December 2023 Survey of Consumer Expectations showed a significant drop in consumer inflation expectations, reaching a 2-year low. Expectations for inflation, earnings growth, and spending growth have all decreased. Despite this, the job market outlook remains positive, with a slight decrease in the perceived probability of job loss and an increase in the probability of finding a new job. Interest rate increase expectations have fallen, while stock market expectations have marginally improved. Stocks, including SPY, QQQ, and IWM, saw gains, while DIA experienced a slight dip due to a decline in Boeing Co's shares.
January 08, 2024 | 5:43 pm
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NEGATIVE IMPACT
Boeing Co (BA) shares declined, contributing to the slight dip in DIA's performance.
As a major component of the Dow Jones Industrial Average, Boeing's share performance has a direct impact on DIA. The decline in BA shares is the primary reason for DIA's slight dip.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
SPDR Dow Jones Industrial Average ETF (DIA) dipped 0.1%, influenced by Boeing Co's share decline.
DIA's slight dip is primarily due to the decline in Boeing Co's shares, which is a significant component of the Dow Jones Industrial Average.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
iShares Russell 2000 ETF (IWM) experienced a 1% increase, possibly due to the positive job market outlook and lower inflation expectations.
Small-cap stocks, like those in the IWM ETF, may benefit from a positive job market outlook and lower inflation, as they can be more sensitive to domestic economic changes.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Invesco QQQ Trust (QQQ) surged 1.2%, likely benefiting from the overall positive market sentiment and lower inflation expectations.
Tech-heavy ETFs like QQQ often react positively to lower inflation expectations, as it suggests a less aggressive interest rate hike policy, which is favorable for growth stocks.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
SPDR S&P 500 ETF Trust (SPY) saw a 0.5% increase, potentially due to lower inflation expectations and positive job market sentiment.
Lower inflation expectations can lead to a more stable economic environment, which is generally positive for the stock market and could lead to increased investor confidence in assets like SPY.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80