MARKET HEADLINES
- Bonds Gain as Worries Renewed Over Credit Markets
- AIG Drags on Dow; Energy Stocks Fall
- Financial Stocks Drag Euro Market Lower
- Oil Over $126, New Peak for 5th Straight Day
- Surging Oil Prices Weigh on Asian Markets
- Treasurys Bounce as Investors Put Refund Cash Into Bonds
- Financials Drag Euro Stocks Lower
- Oil Settles Near $124, Posting Yet Another Record
- Asian Stocks Pressured by Surging Oil Prices
- Oil Rally May Stall Rebound By US Economy, Stocks
- Opening Glance: Telecom carriers mostly decline
- Opening Glance: Media companies' shares slump
- Opening Glance: Most Internet software, services stocks dip
- Opening Glance: Diversified financial shares open mixed
- Opening Glance: Electrical equipment stocks open lower
- Opening Glance: Utilities mixed as market, bond yields fall
- Opening Glance: REITs drop on American Int'l Group losses
- Opening Glance: Rails, shippers fall as oil hits new record
- Opening Glance: Major beverage stocks decline
- Opening Glance: Construction, engineering shares open lower
Today's numbers on personal income and outlays shows more tightening of the consumer wallet, the leading component of the US economy. Consumer spending, which represents ~70% of GDP, hit a 17-month low in February. On an annualized basis, consumer spending has been growing at over 5% per year for the past 10 years while disposable income has grown less than 5% per year. The chart below shows the average annual personal consumption numbers broken out by its three components.
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Services has been growing the most with non-durable goods coming close behind. These two components slowed down dramatically in February, with non-durable spending contracting in the month.
Spending declines are related to overall sentiment which also continues to decline. The Conference Board's Consumer Confidence Index fell to its lowest level since 2003 and the University of Michigan's Index of Consumer Sentiment fell to 69.5, its lowest level since 1992.
Of course these negative sentiments hurt the Consumer Discretionary Sector which is down 7% year-to-date. Retailers, in particular, feel the pain as consumers stop spending. Today, JC Penney [JCP
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] cut its profit forecast on weak sales. Other sample companies feeling the pinch from reduced consumer spending include
- Amazon.com [JNY
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] down 24% for the year
- Best Buy [BBY
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] down 22% for the year
- Jones Apparel [JNY
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] down 17% for the year
- Liz Claiborne [LIZ
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] down 12% for the year
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Data is a real-time snapshot *Data is delayed at least 15 minutes