“Cautious optimism" is the phrase that best describes how investors feel about the economy and its components for the start of 2019.

The Spectrem Household Outlook, which is designed to measure an investor’s optimism about four financial components in their daily lives, rose slightly among all investors in December, from 13.80 to 14.50. But for the final three months of 2018, the Outlook was below 20, and those were the only months of the year to record such a low number.

Among Millionaire investors, the Outlook dropped less than half a point in December, but like the overall rating, sat below 20 (17.66) for the third consecutive month. From a historical standpoint, the Millionaire Outlook has not been below 20 for three consecutive months since December 2015-February 2016.

Non-Millionaires recorded an Outlook of 11.29, also an increase from November, when the non-Millionaire Outlook was at 8.84, by far the lowest level of 2018.

Here is a look at the outlook regarding each component:

ECONOMY

(15.60), down more than 10 points from (4.80) in November

• The Economy is the most volatile of the four Outlook components and the one most likely to respond to stock market movement. With the stock market tumbling 2,000 points during early-to-mid December, it is not surprising to see this number go so low overall.
• The greatest drop from an investor segment standpoint occurred among Millionaires, who sent their Outlook on the Economy from 2.24 to -15.87. Non-Millionaires also dropped their Outlook for the Economy, reaching -15.32, marking a rare occasion when Millionaires and non-Millionaires have a similar view of the Economy.

HOUSEHOLD ASSETS

33.20, down more than 5 points from 38.40 in November

• The Outlook for Household Assets is always the highest number in the measure, but it fell for the third consecutive month. In the Household Assets Outlook rating was 52.80, so that measure has dropped almost 20 points in three months.
• All segments of investors dropped their Household Assets Outlook in December, but among investors who vote Democratic, the rating fell from 38.10 to 11.48, reaching the lowest level of the year.

HOUSEHOLD INCOME

24.80, an increase of 9.6 points from 15.20 in November

• While the Economy and Household Assets provided a pessimistic outlook from investors, Household Income saw optimism across the board. Among non-Millionaires, the Outlook doubled from 11.21 to 23.39, and among males it nearly doubled from 15.73 to 30.99.
• The only segments to report a loss in Outlook about Household Income was females and Democrats, but both decreases were minimal.

COMPANY HEALTH

15.60, an increase of more than 9 points from 6.40 in November

• This component rarely records a change this significant from a month-to-month basis. Among Millionaires, the Outlook for Company Health more than doubled, from 9.70 to 21.43, and among non-Millionaires, it tripled, from 2.59 to 9.68.
• Even among Democrats, the Outlook for company Health improved, reaching back into positive territory after a turn negative in November.

 

©2019 Spectrem Group