The Markets – January 24, 2024

Are you feeling optimistic or pessimistic?

Consumers are a force to be reckoned with – and we’re all consumers. We buy coats and tweezers, electricity and bread, screens and fishing poles. We download apps and games and educational materials. As consumers, we are vital to the American economy. In fact, consumer spending accounts for about two-thirds of the U.S. economy when it’s measured using gross domestic product or GDP.

Many consumers are feeling more optimistic than they have in a while. Last week, the University of Michigan (UM) reported that consumer sentiment is soaring. After a double-digit rise in December 2023, the UM Consumer Sentiment Index rose an additional 13 percent in January 2024. Surveys of Consumers Director Joanne Hsu reported:

“Over the last two months, sentiment has climbed a cumulative 29%, the largest two-month increase since 1991 as a recession ended. For the second straight month, all five index components rose, with a 27% surge in the short-run outlook for business conditions and a 14% gain in current personal finances. Like December, there was a broad consensus of improved sentiment across age, income, education, and geography.”

Investors are feeling pretty good, too. Throughout January, the weekly AAII Investor Sentiment survey found that a higher percentage of investors than usual expected stocks to move higher over the next six months. Last week, though, that percentage dropped lower as uncertainty increased around the depth and timing of possible Federal Reserve rate cuts.

“…the median projection from all Fed officials [is] for three rate cuts in 2024. That is a more conservative outlook than the one shared by investors, who expect six cuts starting in March,” according to a source cited by Jennifer Schonberger of Yahoo! Finance.

Last week, a rally in technology stocks helped the Standard & Poor’s 500 Index close at an all-time high. Yields on many maturities of Treasuries moved higher over the week.

S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance; MarketWatch; djindexes.com; U.S. Treasury; London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

IT’S THE BIGGEST ELECTION YEAR IN HISTORY. This year almost 80 countries will hold elections in which all people of voting age will have the opportunity to cast a vote, reported NPR citing The Economist. While the nations are not all democratic countries, more than 40 are expected to hold free and fair elections, reported Astha Rajvanshi and Yasmeen Serhan of Time. These nations encompass about:

• 41 percent of the world’s population (more than 3 billion people), and
• 42 percent of the global economy (more than $44 trillion).

How many people will actually vote?

The voter turnout is likely to be higher in some countries than it is in others. Here is the average turnout among the voting-age population in a sampling of countries that will hold elections in 2024. (The data was collected from recent election years by Pew Research Center.)

The U.S. League of Women Voters explains the importance of voting like this, “The right to vote is one of the most basic promises of our democracy. In a democratic government, every person is considered equal and is empowered to both participate in their government and speak on the issues that impact their daily lives. Through our votes, we’re able to express our values around concerns like health care, climate change, criminal justice, taxes, and so much more.”

Weekly Focus – Think About It

“Indecision may or may not be my problem.”

—Jimmy Buffett, singer

Best regards,

Daniel J. Murphy, CFP®
Murphy Wealth Management Group
60 Merritt Blvd., Suite 106
Fishkill, NY 12524

P.S.  Please feel free to forward this commentary to family, friends, or colleagues.  If you would like us to add them to the list, please call with their information so that we can get their permission.
Securities offered through LPL Financial
Member FINRA/SIPC
Investment Advice offered through Murphy Wealth Management Group, INC, a Registered Investment Advisor and separate entity from LPL Financial.