Latest consumer sentiment surveys suggest that most believe a recession is not at hand, the inverse of Wall Street and Federal Reserve analysts. Sentiment surveys are the ultimate feedback indicator as historically they only tell us where we have been not to where we are going. However, with the above written, the degree of optimism is high, exceeding all published forecasts. Confidence in December rose by the most since early 2021.
The data also contradicts other sentiment surveys that suggest the country is moving in the wrong direction.
One analyst stated the “surge in confidence is about as silly as the melt up in the markets, a melt up that is perhaps poised to get even sillier.”
As noted several times nothing unfolded in 2023 as expected. The future is always opaque however one must make assumptions for investment decisions, tweaking the conclusions as the assumptions materialize or fail to materialize.
Commenting on yesterday’s market action, the NASDAQ declined about 1.50% for no apparent reason even as Treasuries continued their unrelenting advance. I rhetorically ask how much is the advance the result of beta gammoning and zero dated options [momentum continues until it stops]?
What will happen today? Trading is expected to wane ahead of Christmas.
Last night the foreign markets were down. London was down 0.59%, Paris down 0.49% and Frankfurt down 0.49%. China was up 0.57%, Japan down 1.59% and Hang Seng up 0.04%.
Futures are up about 0.50% on monetary policy optimism. The 10-year is off 4/32 to yield 3.87%.
Kent Engelke
Chief Economic Strategist Managing Director
The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. Any opinions expressed are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. This material is being provided for informational purposes only. Any information should not be deemed a recommendation to buy, hold or sell any security. Certain information has been obtained from third-party sources we consider reliable, but we do not guarantee that such information is accurate or complete. This report is not a complete description of the securities, markets, or developments referred to in this material and does not include all available data necessary for making an investment decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. If you would like to unsubscribe from this e-mail distribution, please reply to this e-mail and indicate that you wish to unsubscribe in your response.
