MARKET OUTLOOK FOR SIA CHARTS

August 2014

United States Consumers Optimistic, Canadians Pessimistic

 
July’s consumer confidence index painted contrasted pictures for residents north and south of the border. The Canadian consumer confidence survey dropped to 85.9, capping off the third straight month the index has fallen. Although the figure as a whole has decreased, consumers in the most Western Provinces are still looking at the cup as half full. Confidence in the Prairies grew to 107.8 and remained at an elevated 105.9 in British Columbia despite a 9.9 point dip. On the contrary, Atlantic Canada continues to be a drag on the index as only 5.9% of the population believes there will be more jobs in the next six months than there is today (Toronto Star, 2014).
 

In the United States consumers are the most optimistic they have been in almost seven years. The consumer confidence index easily beat out economist expectations of 85 points, registering a strong showing of 90.9 (MarketWatch, 2014). Given that personal consumption makes up ~69% of U.S. GDP and ~57% of Canadian GDP, the consumer confidence index tends to be closely monitored by investors (The World Bank, 2014).

As second quarter 2014 earnings season continues, North American stock markets remain in an upwards trend. There has been some positive earnings for individual companies on both sides of the border, and increased consumer confidence should help stock markets continue on their upwards trajectory over the near-term.


Bibliography

Yew, M. (2014, July 29). Canadians grow pessimistic about economy while U.S. consumer confidence hits post-crash high. Toronto Star. Retrieved from

http://www.thestar.com/business/economy/2014/07/29/canadians_grow_pessimistic_about_economy_while_us_consumer_confidence_hits_postcrash_high.html.

MarketWatch – The Wall Street Journal. (2014, July 29). This Weeks U.S. Economic Reports. Retrieved from

http://www.marketwatch.com/economy-politics/calendars/economic?link=MW_Nav_EP.

The World Bank. (2014, July 29). Household final consumption expenditure, etc. (% of GDP). Retrieved from

http://data.worldbank.org/indicator/NE.CON.PETC.ZS.


This newsletter was prepared solely by Bruce Morrison who is a registered representative of HollisWealth™ (a division of Scotia Capital Inc., a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada). The view and opinions, including any recommendations, expressed in newsletter are those of Bruce Morrison only and not those of HollisWealth. TM Trademark of The Bank of Nova Scotia, used under license. Morrison & Partners Wealth Strategies is a personal trade name of Bruce Morrison.