CONSUMER SENTIMENT REBOUNDS: The U.S. economy is substantially driven by consumer spending, and so an important indicator for the health of the economy is consumer sentiment. The University of Michigan maintains a carefully watched consumer sentiment index. This index had been decreasing for three straight months. In October, it rebounded. The October results reflected easing concerns about the trade war with China and little worry, so far, about impeachment. Consumers expect their incomes to continue to rise while a sharp decline in interest rates added to their optimism. Expectations for real income gains rose to the most favorable level in twenty years.
STOCKS SOAR ON NEWS OF….YOU GUESSED IT: In the movie Armageddon, most of the main characters were on an asteroid that was racing to the earth, possibly to destroy it. Their mission was to blow up the asteroid and return to earth. The mission kept getting changed as events unraveled, and for some comic humor in the midst of the life-and-death suspense, the character played by Steve Buscemi shouted, “We’re staying, we’re going, we’re staying, we’re going. Make up your mind!” That came to mind this week when the stock market shot up on news that, you guessed it, the U.S. and China are making progress in trade talks. Stocks rallied after President Trump said that the two countries reached a “very substantial Phase One deal” and agreed not to implement tariffs set to go into effect next week. Meanwhile, China said it would increase purchases of U.S. agricultural products. The stock rally was broad based across all sectors and ended a three-week losing streak for the S&P 500.
BREXIT?: We have been hearing mostly negative news about the prospects of a Brexit deal. This week, however, some positive news occurred. Leaders in the European Union and the UK are preparing for summit meetings next week. Informal meetings have been taking place leading up to the summit, including meetings between leaders in the UK and Ireland. This past week, European Council President Donald Tusk stated, “Yesterday when the Irish Taoiseach and the U.K. Prime Minister met they both saw – for the first time – a pathway to a deal.” British stocks and the value of the British Sterling soared.
SOCIAL SECURITY INCREASES: For the 69 million Americans receiving Social Security Supplemental Security Income, their income will increase by 1.6% in 2020.
A CLOSE SECOND: Last year hotel occupancy in the U.S. set records. Although 2019 is looking like a very healthy year for the hotel industry, it will probably come in a close second to last year.