Expectations
Why Is Confidence “Inverted?”
In a recent “Chart of the Week,” we discussed the late-cycle “inversion” in Consumer Confidence, where consumers’ views of their “Present Situation” have jumped far above their “Expectations.” That’s the reverse of what’s typical in the first couple years of an economic expansion.
Why Is Confidence “Inverted?”
Stimulus and soaring stock prices have contributed to the fastest consumer-confidence rebound of any economic recovery on record. Yet the manner in which this bounce has unfolded is anything but “early cycle.”
Key Observations On Q2 S&P 1500 Earnings
Year-over-year EPS growth rate for companies with Q2 reports (with about 65% in) currently stands at +4.2%, while revenue growth has come in at a better than expected +2.6%.
Lowered Expectations — Policy Effectiveness
For central bank policy effectiveness, global economic growth, interest rates, and inflation. While lowered expectations are a good thing in the near term, long term return expectations for most asset classes should be lowered too.
Public Confidence Measures
The driving force behind today’s stock market is the public. Never before had they had such clout.
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