The Consumer Is King
Low inflation and improved incomes should lead to consumers opening their wallets a bit wider this holiday season says Morningstar's Bob Johnson.
While there were a ton of indicators announced this week, they didn't really move our understanding of the economy ahead by much. Most of the data was mere noise, in my opinion, or indiscernible from other previously released data sets. Worse yet, the indicators have pushed into the highly uncomfortable stage where the reports become contradictory.
On Monday we got the regional purchasing managers report from New York, which painted a picture of a rapidly declining manufacturing sector. On Thursday the Philly Fed announced that the manufacturing sector showed incredible strength for the same period (November).
Even corporations can't seem to agree. Last week, Cisco's (CSCO) earnings report seemed to indicate some softening in business investment in technology. This week Dell (DELL), poster child of corporate technology spending, knocked the cover off the ball. Even housing starts and newly permitted housing couldn't manage to move in the same direction.
Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.