Up about 100 in late trading Friday, nice gain heading into the weekend.
If I had bought in the last week, I would be selling right now, depending of course on what I bought. I have no confidence in these index levels, going forward.
Just listened to a quick vid on M* from Bob Johnson, where he describes why he thinks that "consumer spending" will rise between now and 2015, and where he gives a few possible confounding factors.
Adjusting for the holiday season, I disagree that "consumer spending" will rise.
His 5 factors:
1) decreasing gas prices
2) decreased interest rates
3) decreasing new unemployment claims
4) return to historical spending rates
5) low inflation.
He acknowledges that "the consumer has been remarkably conservative in 2014", and that increases in spending have been about half those in wage increases, but he expects that to change (4), without offering any argument why he believes that to be the case. In fact, he argues to the contrary, that the "wealth effect" will decrease in the increasingly volatile market environment.
(2) relates to the housing market in particular, and how home purchase tends to drive consumer purchases, and he acknowledges that it is offset by increasing housing costs, including rent
(1) might matter a little bit, but the extra is already taken up, and then some, by increasing health care costs. If those costs are included in "consumer spending", then for sure it will rise.
(3) is ridiculous. That number is so meaningless it's hardly worth discussion. It doesn't mean that there are more jobs out there, or that they are any good, what it means is that the boomers are aging and leaving the market, for good (among other things, of course).
He doesn't really come down on one side or another, but gives factors on both sides--however, the impression I get is that he is trying to be optimistic, but that it's not working for him.
A good weekend to all, US elections are not far off...