The U.S. consumer has been worried for years... It wasn't just 2022's brutal bear market. Between the pandemic and the high inflation of 2021, consumers hit the panic button long before stocks began falling.
Editor's note: Regular ChaikinPowerFeed readers know we've been sharing occasional insights from beyond Chaikin Analytics on why stocks have room to run higher this year...
Over at our corporate affiliate Stansberry Research, our friend Brett Eversole has been bullish on stocks for 2024. We've previously shared evidence from him on why he thinks so – and today, we're sharing another piece.
This essay is from the April 18 edition of Brett's free DailyWealth e-letter. And in it, he discusses why a recent sentiment breakout is good news for stocks...
Consumer Sentiment Just Hit a Multiyear High
By Brett Eversole, editor, Stansberry Research
The U.S. consumer has been worried for years...
It wasn't just 2022's brutal bear market. Between the pandemic and the high inflation of 2021, consumers hit the panic button long before stocks began falling.
The market decline occurred alongside a seemingly obvious looming recession. But that recession hasn't shown up yet... And now, the American consumer is finally getting optimistic again.
Consumers are the most bullish they've been since mid-2021. And as I'll explain, this recent sentiment breakout isn't just a good sign for the economy... It's a good sign for stocks, too.
During the last THREE presidential races, it has delivered winners 100% of the time (55 wins and ZERO losses). Those aren't back-tested results either... they're coming from a strategy that's currently on an incredible 208-trade win streak. Find out how to start using it as early as tomorrow, right here.
The ONLY way Democrats can keep the White House is to bring back Barack Obama. And there's a sneaky (yet 100% legal) way to achieve this. In fact, this disaster scenario is already underway. See what they're up to, and how you can get ready today. Here's the full video exposé.
It's important to remember that the market doesn't always boom in a healthy economy. Stocks can do poorly even if the economy is doing just fine. On the flip side, stocks often begin major bull runs during the depths of a recession.
Still, stocks need a strong economy to thrive over the long term. And that means an improvement in consumer sentiment is good news for future returns.
We can see this through the University of Michigan Consumer Sentiment Index. Researchers at the University of Michigan build this index by surveying at least 600 Americans each month.
This index has decades of history behind it. So it gives powerful insight into what the typical American thinks about the state of the U.S. economy.
Today, folks are finally waking up to the fact that the economy isn't as bad as many had thought. This index has been on the rise in recent months. And it recently broke out to a multiyear high. Take a look...
Consumer sentiment has been sour for a while. And given the pandemic, multidecade-high inflation, and a stock market rout, that's no surprise.
But as you can see in the chart, sentiment is finally reversing. This index recently hit its highest level since 2021. And the breakout we just saw is a powerful sign for stock returns going forward.
To see it, I looked at each new instance of consumer sentiment breaking out to current levels. That has only happened 10 other times in nearly half a century. And it has always led to continued stock gains. Check it out...
Stocks in general have led to fantastic returns since our data began in 1978. That was near the generational bottom in the early 1980s. And the S&P 500 Index has returned 9.2% a year since then.
But you can crush that return if you buy when consumer sentiment is on the rise. Similar setups led to 4.4% gains in three months, 5.9% gains in six months, and 12.6% gains in a year.
That solid outperformance is even more impressive when you consider the track record: Stocks were higher a year later 100% of the time.
Still, nothing is certain in the markets. This could be the first time stocks fall after consumer sentiment breaks out. But history shows betting against this kind of track record isn't wise.
Instead, we should look at this for what it is... The consumer is finally waking up to the strong state of the U.S. economy.
A lasting economic boom is a good sign for stocks. And that means we want to bet on higher stock prices right now.
Good investing,
Brett Eversole Editor's note: In his DailyWealth e-letter, Brett's mission is to share the world's best wealth ideas with readers. These strategies are designed to help you safely and steadily build a lifetime of wealth.
Like the PowerFeed, DailyWealth is completely free of charge. And it publishes in the morning every weekday the markets are open. To learn more and sign up to receive it, click here.
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.51%
9
19
2
S&P 500
-0.87%
119
308
71
Nasdaq
-2.07%
12
69
19
Small Caps
+0.13%
338
1110
458
Bonds
+0.36%
Utilities
+1.54%
4
26
0
— According to the Chaikin Power Bar, Small Cap stocks are somewhat more Bearish than Large Cap stocks. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Utilities
+1.92%
Staples
+1.44%
Financial
+0.8%
Health Care
+0.03%
Materials
-1.07%
Energy
-1.21%
Industrials
-1.98%
Communication
-2.29%
Real Estate
-3.65%
Discretionary
-4.15%
Information Technology
-6.27%
* * * *
Industry Focus
Software & Services
15
92
27
Over the past 6 months, the Software & Services subsector (XSW) has underperformed the S&P 500 by -1.78%. Its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #14 of 21 subsectors and has moved down 6 slots over the past week.
Indicative Stocks
WK
Workiva Inc.
VYX
NCR Voyix Corporatio
U
Unity Software Inc.
* * * *
Top Movers
Gainers
PARA
+13.4%
AXP
+6.23%
FITB
+5.93%
WBA
+3.7%
KMI
+3.46%
Losers
SMCI
-23.14%
NVDA
-10.0%
NFLX
-9.09%
JBL
-8.36%
AMD
-5.44%
* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
TFC, VZ
AMP, NUE
BRO, CDNS, GL, PKG, TXN
ARE
No earnings reporting today.
Earnings Surprises
HBAN Huntington Bancshares Incorporated
Q1
$0.28
Beat by $0.03
AXP American Express Company
Q1
$3.33
Beat by $0.35
PG The Procter & Gamble Company
Q3
$1.52
Beat by $0.11
FITB Fifth Third Bancorp
Q1
$0.76
Beat by $0.04
RF Regions Financial Corporation
Q1
$0.44
Missed by $-0.02
* * * *
You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, click here.
You're receiving this e-mail at diansastroxz.forex@blogger.com.
For questions about your account or to speak with customer service, call +1 (877) 697-6783 (U.S.), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized investment advice.
Any brokers mentioned constitute a partial list of available brokers and is for your information only. Chaikin Analytics, LLC, does not recommend or endorse any brokers, dealers, or investment advisors.
Chaikin Analytics forbids its writers from having a financial interest in any security they recommend to our subscribers. All employees of Chaikin Analytics, LLC (and affiliated companies) must wait 24 hours after an investment recommendation is published online – or 72 hours after a direct mail publication is sent – before acting on that recommendation.
This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.
Post a Comment
Post a Comment