5 Stocks To Buy On 15-Year High Consumer Confidence

Optimism about the economy increased in December according to the latest reading of the consumer confidence index. This is yet another sign that much of the positive impetus acquired by the economy after the presidential election remains. Clearly, President-elect Trump’s promises of fiscal stimulus, tax cuts and deregulation are hitting the right note with a large section of the populace. 

Meanwhile, other readings also indicate a general improvement in sentiment even as broader economic indicators continue to improve. This makes it a good time to add consumer focused stocks to your portfolios.

Highest Reading Since 2001

According to The Conference Board, the Consumer Confidence Index increased from 109.4 in November to 113.7 this month, hitting the highest level since 2001. The reading also came in above the consensus estimate of 108.6. The gauge of consumer expectations for the six months to follow rose from 94.4 to 105.5. This is the highest reading recorded in 13 years.

Additionally, 23.6% of respondents now expect an improvement in business conditions after six months, higher than the 16.4% recorded last month. This is also the best reading experienced since Feb 2011. Significantly, 21% of respondents now expect their incomes to increase over the next six months compared to 17.4% in November.  

Trump Expected to Deliver on Promises

After an initial hiccup following the surprise verdict, equity markets have warmed to the idea of a Trump administration. Investors expect the new administration to be better for business. Meanwhile, a number of indicators have shown that the economy continues to improve.

Among the most salient of these, unemployment declined to 4.6% in November.  Additionally, GDP increased by 3.5% in the third quarter according to the final reading of the Bureau of Economic Analysis. Moreover, the University of Michigan reported that its consumer sentiment index rose this month to a 12-year high level of 98.2.

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