US Consumer Sentiment Tops Estimates In January, Hits Highest Level Since July 2021: Friday's Economic Digest
Portfolio Pulse from Piero Cingari
U.S. consumer sentiment in January 2024 reached its highest level since July 2021, with the University of Michigan's index surging to 78.8. The report also noted a decrease in consumer inflation expectations. However, existing home sales fell by 1.0% in December 2023, hitting an annualized rate of 3.78 million units, the lowest since August 2010. In response, major U.S. stock averages rose slightly, with SPDR S&P 500 ETF Trust (SPY) up 0.3%, and Invesco QQQ Trust (QQQ) up 0.7%. U.S. Treasury yields increased, while the iShares 20+ Year Treasury Bond ETF (TLT) fell 0.3%.
January 19, 2024 | 3:57 pm
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POSITIVE IMPACT
Invesco QQQ Trust (QQQ) increased by 0.7%, outperforming other indices, likely due to the tech sector's lead.
Tech stocks often lead market rallies, and the increase in consumer sentiment could translate into higher consumer spending on technology, benefiting QQQ.
CONFIDENCE 80
IMPORTANCE 65
RELEVANCE 70
POSITIVE IMPACT
SPDR S&P 500 ETF Trust (SPY) rose 0.3% amid positive consumer sentiment data, suggesting increased household demand.
The rise in consumer sentiment is a positive indicator for the economy and can lead to increased spending, potentially benefiting the broad market and the SPY ETF.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
iShares 20+ Year Treasury Bond ETF (TLT) fell 0.3% as Treasury yields rose, indicating a decrease in bond prices.
The increase in Treasury yields typically leads to a decrease in bond prices, negatively impacting bond ETFs like TLT in the short term.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70