Here is a short recent history lesson on investor optimism:
The Spectrem Household Outlook measures an investor’s optimism about four financial components in their daily lives, including Household Income, Household Assets, and the Economy. From July 2017 to September 2018, the Spectrem Outlook registered above 20, and rose to 39.90 in January of 2018.
But optimism shifted downward in the latter half of 2018, and the Outlook fell to 10.90 in January of 2019, just two months ago. That was the lowest Outlook performance in three years.
So the fact the Outlook is now in the 20s is either a good thing or a bad thing, depending on your overall impression of the current direction of the American economy and its impact on American households.
In March, the Spectrem Outlook among all investors registered at 21.60, a half-point rise from February’s rating. The biggest increase in Outlook was among working investors, who registered an Outlook of 31.54, compared to the dropping Outlook among retired investor to 10.4.
The Outlook may be impacted by the lack of movement in the stock market indices, which was steady for most of the month of March after such a volatile period in December and January. The Spectrem survey was conducted from March 18-21, during which the Federal Reserve Board reported no intention to raise interest rates for the remainder of 2019, which most observers believed indicated a dip in economic growth both domestically and globally.
Among the four categories in the Outlook, the Outlook for the Economy showed the greatest improvement, pulling out of negative territory for the first time in six months.
Here is a look at the outlook regarding each component:
1.60, up from (3.20) in February.
The Outlook for the Economy was in negative territory from October 2018 to February 2019, and that was the first time the Outlook had been negative for the Economy since October of 2016. All investors rated the Economy higher in March than in February, although the rating remained negative among female investors, retired investors and investors who consider themselves Democrats.
Economic observers reacted with concern when the Federal Reserve announced no plans to raise interest rates for the remainder of 2019, indicating concern that economic growth has slowed dramatically.
46.00, down 4.6 from 49.60 in February.
The Outlook for Household Assets fell significantly among non-Millionaire investors and was the most depressed category among Outlook indicators. But the Household Assets rating in January was 29.20, one of the lowest ratings in the history of the Outlook, so the current rating is seen as a recovery.
The only segment to report an increase in Outlook over Household Assets from February was Millionaire investors but the increase was by less than 1 point.
26.00, a 3.2 point increase from 22.80 in February.
Household Income Outlook was also historically low in January, and the recovery continues into March, as the Outlook for Income rose across the board, most significantly among non-Millionaires, 17.74 to 22.39. There was only one month in the previous 12 when the Outlook for Household Income was as high as it is now among all investors.
However, there was a sizable drop in Household Income Outlook among Republicans, from 37.63 to 26.53.
12.80, down from 15.20 in February.
There were definitely mixed messages coming from corporate earnings reports in March, and the Outlook for Company Health indicated that. After two months of improvement, the rating for Company Health fell in March to 12.80. Historically, the Outlook for Company Health sits above 10 and moved up to 26 in January of 2018, so that rating has been cut in half over the past 14 months.
However, among working investors, the Outlook for Company Health rose in March from 16.03 to 24.62.
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