By Ian McKendry
WASHINGTON (MNI) – The U.S. presidential election appears to have
had a negative impact on consumer optimism as Republicans were
disappointed with the result and major stock market indexes have dipped.
“This weakness confirms the more than 3% drop in major stock
indexes since the election,” Terry Jones, associate editor of Investor’s
Business Daily, said in a statement Tuesday.
“Optimism among investors plunged 19% in November, from 53.2 to
43.1, while it remained flat for non-investors,” Jones added.
The Investor Business Daily/TIPP Economic Optimism Index —
designed to foreshadow confidence indicators such as the University of
Michigan Consumer Sentiment and the Conference Board’s Consumer
Confidence — fell 10% in November to a reading of 48.6.
The reading is still above its 12-month average of 48.2, but any
reading below 50 indicates pessimism.
Two of the three sub-components were also down, with the six-month
outlook falling 20.8% to 46.8 and the personal financial outlook falling
8.3% to 55.5. The one index that rose was the one that measures
confidence in federal economic policies which rose 2.9% to 43.5.
Some analysts suspect that some of the stock market sell-off could
be due to investor fears of higher tax rates on dividends and capital
gains.
TIPP president Raghavan Mayur said the more than 18% surge in
optimism seen from August to October was largely driven by Republican
hopes of taking the White House and the drop in November is partially
due to that not occurring. TIPP is a polling unit of TechnoMetrica
Market Intelligence.
The preliminary reading from the University of Michigan Consumer
Sentiment index is that confidence rose 2.8% to 84.9 in November. The
Conference Board Consumer Confidence index rose 5.6% to 72.2 in October
and the November reading is due out November 27. The final reading for
the November Michigan Consumer Sentiment will be released November 21.
** MNI Washington Bureau: 202-371-2121 **
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