September 17, 2018
All investors are consumers, but not all consumers are investors.
The September installment of University of Michigan’s Consumer Sentiment Survey reported Americans are feeling pretty optimistic. Consumer sentiment rose to the second highest level since 2004, and consumer expectations reached the highest level since 2004. Surveys of Consumers chief economist, Richard Curtin, wrote:
“Consumers anticipated continued growth in the economy that would produce more jobs and an even lower unemployment rate during the year ahead…The largest problem cited on the economic horizon involved the anticipated negative impact from tariffs. Concerns about the negative impact of tariffs on the domestic economy were spontaneously mentioned by nearly one-third of all consumers in the past three months, up from one-in-five in the prior four months.”
Investors weren’t as optimistic, according to the American Association of Individual Investors (AAII). Last week, the AAII Investor Sentiment Survey reported bullish sentiment dropped more than 10 percentage points. The results were:
• Bullish 32.1 percent of respondents (historic average: 38.5 percent)
• Neutral 35.1 percent of respondents (historic average: 31.0 percent)
• Bearish 32.8 percent of respondents (historic average: 30.5 percent)
Despite the apparent shift in investor attitudes, stock markets moved higher last week. Vito J. Racanelli of Barron’s wrote:
“The stock market radiated confidence this past week, finishing about 1 percent higher despite choppy action. There was a plethora of good economic news – from lower-than-expected inflation to sky-high business and consumer confidence numbers – that drove shares up. Not even a ratcheting up of tough tariff talk Friday on the part of the U.S. could dampen investor enthusiasm for long.”
Some believe the AAII Sentiment Survey is a contrarian indicator. Last week, that may have been the case.
WORDIES UNITE! The Merriam Webster Dictionary added some new words during 2018. A favorite among fans of dictionaries is ‘wordie,’ which means ‘word lover’ and should not be confused with ‘wordy,’ which describes something with too many words. Dictionary newcomer ‘TL;DR’ (the new word that means ‘too long; didn’t read’) could be used to describe a reader’s response to something that’s wordy.
A few of the new additions are descriptions of dog breeds, including:
• Chiweenie: a cross between a Chihuahua and a dachshund
• Schnoodle: a cross between a schnauzer and a poodle
• Yorkie-poo: a cross between a Yorkshire terrier and a poodle
A number of ‘wanderworts’ – words that have wandered from one language into another – also made the list. These include:
• Harissa: spicy North African chili paste
• Kabocha: a type of Japanese pumpkin
• Kombucha: a fermented, bubbly tea drink
Many of the new entries are abbreviated versions of longer words that have been part of our vocabulary for a long time. This may be the inevitable outcome in a society that adapts to the communication shorthand demanded by text, photo, and social media apps. See if you can guess the longer version of these new words:
If you get stumped, give us a call.
Weekly Focus – Think About It
“Language is the road map of a culture. It tells you where its people come from and where they are going.”
--Rita Mae Brown, American author
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https://www.barrons.com/articles/the-dow-gains-238-points-tariffs-be-damned-1536973652?mod=hp_highlight_6 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/09-17-18_Barrons-The_Dow_Gains_238_Points-Tariffs_be_Damned-Footnote_3.pdf)