As summer and autumn turn to winter, sunlight decreases, temperatures drop and many people settle in for the gloom of the season.
In December, investors expressed their own level of gloom with a reduced Outlook for the immediate future, according to Spectrem’s monthly Household Outlook.
The Spectrem Outlook asks investors to judge their anticipation for four components of their household finances, and the combined ratings create the overall Outlook number. In December, that Outlook fell by almost 6 points, from 22.30 to 16.50. All four components fell among Millionaires, and non-Millionaires dropped their Outlook for three of four components, with only a more positive view for their household assets.
The Spectrem Investor Confidence Indices survey was conducted from December 12-18, 2019, when the stock market indices were all climbing due to more positive talk about global trade wars and retail sales reports. At the same time, President Donald Trump faced impeachment hearings and votes in the House of Representatives, which may have colored investor response to how that might impact household finances going forward.
Here is a look at current response to each component of the Spectrem Household Outlook:
-8.80, a drop of more than 10 points from 1.60 in November
After months of negative Outlook for the economy, the number moved slightly above zero in November, only to return to well below zero in December. Both Millionaires and non-Millionaires turned in negative Outlooks for the economy in December, and the decrease among non-Millionaires was by more than 13 points. Non-millionaires have had a negative Outlook for the economy for eight of the 12 months of 2019.
The Investor Outlook for the economy is a clear signal that investors understand the popular economic statement that “the stock market is not the economy.” While investors are still investing vigorously in the stock market, investors do not see a corresponding positive result in the economies of their household.
42.40, a slight drop from 43.60 in November
Non-Millionaires gave a thumbs up to their household assets Outlook in December, improving from 35.25 to 40.68. Millionaires were not feeling it, dropping their Outlook for household assets from 51.56 to 43.94. This category is an examination of how investors feel about the investment assets they have in place, and the Outlook remains positive, but events do cause investors to raise or lower their attitudes toward investment performance accordingly. The increasing stock market improves household assets overall.
Male investors and retired investors reported an increase in their Outlook for household assets in December.
23.60, down almost 5 points from 28.40 in November
The Outlook for household income fell overall for the second consecutive month. Investors across all segments reported a decrease in Outlook for household income, which might be a reaction to the end of the year, when tax considerations come into play.
Working investors dropped their Outlook for household income by almost 9 points, a very significant decrease.
8.80, a drop of more than 6 points in November
This component rarely has large moves up or down, so a decrease this large is significant. Company health reflects corporate earnings reports as well as employment decisions by the big firms in America, but jumps up or down whenever tariffs and global trade matters move. The negotiations between the United States and China turned in a small improvement in December, but the overall trade package remains uncertain. At the same time, the new NAFTA trade agreement between the U.S., Mexico and Canada appeared ready to move out of the House of Representatives, and economists are uncertain how it will actually impact American companies.
©2019 Spectrem Group
Keywords: index, outlook, investors, advisors, assets, income, company health, economy, Spectrem