US vs. the World, a Tale of Two Consumers
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Growing trends favor the US consumer over consumers overseas, particularly consumers in Europe who are under intense pressure.
On Friday US consumer confidence for May was reported well above expectations, reaching the highest level since October 2007. On the other hand, Italian consumer confidence in May was reported at a 15 year low early this month. The contrast in sentiment is stunning, and clearly investors are taking notice.
In the past 5 days, US consumer discretionary stocks have diverged from international consumer discretionary stocks. The divergence becomes clear when comparing SPDR S&P International Cons Disc Sector (NYSE: IPD) with Consumer Discret Select Sector SPDR (NYSE: XLY). XLY is up 3 percent while IPD is down 2 percent in the same period.
The recent consumer confidence numbers in the US are telling us the consumer is feeling better, according Robert Brusca, president of Fact & Opinion Economics in New York. "There seems to be enough real improvement in the job market for confidence to be increasing. When confidence readings increase, you can be pretty sure consumer spending numbers will go up."
On Friday US consumer confidence for May was reported well above expectations, reaching the highest level since October 2007. On the other hand, Italian consumer confidence in May was reported at a 15 year low early this month. The contrast in sentiment is stunning, and clearly investors are taking notice.
In the past 5 days, US consumer discretionary stocks have diverged from international consumer discretionary stocks. The divergence becomes clear when comparing SPDR S&P International Cons Disc Sector (NYSE: IPD) with Consumer Discret Select Sector SPDR (NYSE: XLY). XLY is up 3 percent while IPD is down 2 percent in the same period.
The recent consumer confidence numbers in the US are telling us the consumer is feeling better, according Robert Brusca, president of Fact & Opinion Economics in New York. "There seems to be enough real improvement in the job market for confidence to be increasing. When confidence readings increase, you can be pretty sure consumer spending numbers will go up."
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