Latest / Markets with Megan: A Quick Financial Markets Update / What Happened to Consumer Confidence? | Episode 70 | 11-10-23

Transcript

What Happened to Consumer Confidence? | Episode 70 | 11-10-23 · Markets with Megan: A Quick Financial Markets Update

• 0:03
  Megan Horneman: Hello, this is Megan Horneman, the Chief Investment Officer for Verdence Capital Advisors, coming to you today with our regular segment of Markets with Megan, and we're rounding out this week with a pretty disappointing report on consumer confidence.
• 0:14
  Megan Horneman: This is consumer confidence as reported by the University of Michigan Consumer Sentiment Index and it is consumer confidence for the beginning of November, so we will get a final reading at the end of the month.
• 0:26
  Megan Horneman: So what this shows is that consumer sentiment, not only in the current conditions but also future expectations, declined.
• 0:35
  Megan Horneman: Current conditions can decline the most.
• 0:38
  Megan Horneman: Some of the other details within the report are sentiment that the individual's household income will beat inflation over the next couple of years.
• 0:46
  Megan Horneman: That's near a 10-year low.
• 0:48
  Megan Horneman: When you look at those consumers that were surveyed, those that are saying it's a good time to buy a house that's near the lowest we've seen since the early 1980s and then also whether it's a good time to buy a major household item or an automobile, these are also declining as well.
• 1:05
  Megan Horneman: This isn't surprising because interest rates are very high across the board for loans, whether it's credit card loans, whether it's mortgage rates, whether it's auto loans.
• 1:14
  Megan Horneman: This is concerning from the consumer standpoint.
• 1:17
  Megan Horneman: It's starting to be felt.
• 1:18
  Megan Horneman: But the main takeaway from this report is.
• 1:21
  Megan Horneman: The University of Michigan also surveys inflation expectations.
• 1:25
  Megan Horneman: This is going to get the Federal Reserve's attention because inflation expectations for the longer term the next five to 10 years they actually rose to the highest level since 2011.
• 1:36
  Megan Horneman: The Fed's not going to like that.
• 1:38
  Megan Horneman: Yesterday, the Fed was vocal about keeping interest rates higher for longer and that they may have to even raise rates again.
• 1:45
  Megan Horneman: So this is something they're going to be paying attention to and may impact what they do at their December meeting.
• 1:50
  Megan Horneman: That's all we have today.
• 1:51
  Megan Horneman: If you have any questions or comments, please feel free to reach out to podcast at verdence dot com.
• 1:56
  Megan Horneman: Thank you.