Consumer confidence lifts Wall Street

After several days of declines, finally buyers have mounted an assault on the market, stirred into action by the surprising strength of consumer confidence this month.

Although having eased back a little from the highs of the day, the major US stock indices were still up a fair amount by early afternoon on Wall Street. The Dow was 0.54% higher at 15,923, a similar move to the S&P 500 index which gained 0.57% to 1791.7.

It’s been tougher for the NASDAQ 100, which fell 0.36%, as the index is more influenced by losses in Apple. The iPhone maker has fallen more than 7% today after last night’s results disappointed investors. Although Apple beat expectations with its earnings, its iPhone sales failed to meet forecasts, despite setting a new record.

Other high-profile results have been quite good, with Pfizer and Ford Motor Co both beating expectations with their quarterly earnings.

The biggest lift to the market came from the Conference Board’s consumer confidence index, which surged to a reading of 80.7, comfortably higher than the 78.1 that had been forecast by a Reuters poll of analysts. The present situation component jumped 3.8 points to a post-financial crisis high of 79.1 and there was also strength in the income expectations. Such a strong result for consumer confidence raises hopes that consumer spending will improve this month, which would surely provide a shot in the arm for the US economy.

The sentiment in the financial markets certainly appears to be more risk-hungry today than we’ve seen for the last few trading sessions, which has dented safe-haven assets such as gold and the Japanese yen. Spot gold sunk 0.52%, while the US dollar rose 0.37% against the yen.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.