There are four components to the monthly Spectrem Household Outlook, and three of them rose for a second consecutive month in October.
But investors cannot shake their uncertainty regarding the economy, and indicate such in their responses for the Spectrem survey.
The summer speculation regarding a possible recession, amid very high stock market numbers, confused investors and remains on their minds as they judge how they feel about the economy going forward. Otherwise, their outlook regarding their household finances seems to be improving.
The Spectrem Household Outlook for October climbed among all investors from 14.50 to 18.10, marking a second month of improvement. Note, however, that the Outlook for investors stood above 20 for six consecutive months earlier in 2019, so the Outlook remains low.
The Spectrem Investor Confidence Indices survey was conducted from October 18-21, 2019, during which the three major stock market indices remained unusually high and the S&P 500 neared a record close on one of those days. At the same time, more witnesses offered their take on the controversy surrounding President Donald Trump’s conversation with the newly elected president of Ukraine, the negotiations over trade with China seemed at a standstill, and Brexit was on hold following a tumultuous political environment in Great Britain. The international events may not have as much of an impact upon household finances as the domestic matters.
Here is a look at the outlook regarding each component:
(14.80), a drop from (12.40) recorded in September
It has now been three consecutive months that the Outlook for the economy among all investors has been in negative territory, and more than a year since the Outlook for the economy has been in positive double digits. Over the past 12 months, the Outlook for the economy has been in negative territory for eight months.
The only segment of investors that reported an increased Outlook for the economy was among those who vote Republican, and that is also the only segment of investors which reports a positive Outlook for that component (25.53). Of course, Democrats more than match that positive report with a negative one, rating the Outlook for the economy at -53.73. Independent investors report an Outlook for the economy at -25.30.
It seems that only certain outcomes for economic conditions, like a settled negotiation with China or Brexit, or a dramatic decrease in the benchmark interest rate, would cause the Outlook for the economy to pull back into positive territory.
41.60, an improvement of more than 4 points from the 37.20 reported in September
A second month of improvement in this factor still does not get it back to where it was from February through July, when it was in the mid-to-high 40s or above 50. The assets category, too, would be positively impacted by a decrease in interest rates.
The categories of investors reporting the highest increase in their Outlook for Household Assets were Republicans again, females and retired investors.
31.20, an increase of more than 8 points from 22.80 in September
In the past two months, the Outlook for household income has more than doubled, from 15.20 in August to the October rating of 31.20. It now sits at the highest mark recorded in the Spectrem Household Outlook since December of 2007, just before the Great Recession.
The increase was recorded among Millionaire investors, from 18.60 to 32.28, and from female investors, from 17.82 to 30.61.
14.40, a rise of 4 points from 10.40 in September
The company health Outlook has registered between 6 and 17 for the past year, and there is probably some response to reports of tariffs and negotiations with China, concerns over some resolution in Europe with the Brexit negotiations, a concreate relationship with Mexico, and speculation surrounding the impeachment hearings of President Donald Trump.
But corporate earnings reported in mid-October were mostly positive, buoying the stock market throughout the month. While farmers remain uncertain of their situation due to the Chinese conversations, corporate America seems to be thriving.
Based on segmentation, the highest improvement in company health Outlook was reported among non-Millionaires and females.
©2019 Spectrem Group
Keywords: outlook, investors, advisors, Spectrem, household income, household assets, economy