Core Insights - A significant shift in American happiness levels is impacting investment behavior, leading to undervaluation in high-yielding closed-end funds (CEFs) [2][3][10] Consumer Sentiment - The General Social Survey indicates that while most Americans report feeling "pretty happy," the percentage of those who are unhappy reached a new high in 2022, with "very happy" individuals at a new low [4][5] - Consumer confidence, as measured by the University of Michigan and OECD, is currently lower than during the pandemic, despite lower unemployment and rising incomes [6][8] Market Implications - The disconnect between consumer sentiment and economic indicators suggests that traditional survey-driven research may be less reliable, impacting investment strategies [10][11] - The Liberty All-Star Growth Fund (ASG) is experiencing a discount to net asset value (NAV) that is significantly deeper than historical averages, attributed to risk-averse investors reacting to negative sentiment [13][14] Investment Opportunity - ASG has a 10.2% annualized return and a current yield of 9%, presenting a potential buying opportunity as discounts are expected to narrow once market sentiment adjusts [14][16]

Economic Overview - The retail sector has underperformed, with the S&P Retail Select Industry Index gaining less than 8% since the start of the year, compared to nearly 17% for the S&P 500 [1] - However, the retail index gained over 9% in the trailing half-year period and surged more than 7% in the past 30 days, outperforming the S&P 500, which only returned 0.56% [2] Consumer Sentiment and Spending - Recent economic data indicates a slight easing in the Federal Reserve's preferred inflation gauge, with core personal consumption expenditure (PCE) slowing from 2.9% to 2.8% [3][4] - Consumer spending increased by $65.1 billion or 0.3%, aligning with consensus forecasts [4] - Consumer sentiment improved from 51.0 points in November to 53.3 in December, marking a 4.5% gain, while consumer expectations rose from 51.0 to 55.0 points [5] Retail Sector Adaptation - Retailers are adapting to the economic environment, with Dollar Tree Inc. beating third-quarter estimates and showing strength across all income groups [7] - Many retail-oriented enterprises are shifting strategies to omnichannel and digital fronts to maximize revenue [7] Investment Opportunities - The Direxion Daily Retail Bull 3X Shares (RETL) ETF offers a leveraged investment option, tracking 300% of the performance of the S&P Retail Select Industry Index [8] - The RETL ETF has lost over 3% since the start of the year but has increased by 17% in the last six months, supported by robust sentiment and trading volume [11] - The ETF is currently above the 50- and 200-day moving averages, with critical support at the $8 level and a target of $10 for bullish investors [11]

Economic Overview - U.S. Treasury Secretary Scott Bessent indicated a "very strong" holiday shopping season and predicted a robust end to the year for the U.S. economy [1] - The economy has outperformed expectations with a reported 4% GDP growth in several quarters, and a forecast of 3% real GDP growth for the year despite challenges such as the Schumer shutdown [2] GDP Performance - The Bureau of Economic Analysis reported a contraction of 0.6% year-over-year in GDP for the first quarter of 2025, followed by a significant increase of 3.8% in the second quarter [2] - Initial estimates for third-quarter economic results are set to be published on December 23, with the Federal Reserve Bank of Atlanta projecting an annual GDP growth of 3.5% for that quarter [3] Consumer Sentiment - Consumer spending, which constitutes nearly 70% of U.S. GDP, remains pessimistic, as indicated by the University of Michigan's consumer sentiment survey, which recorded a score of 53.3 in December. This reflects a 4.5% increase from November but a 28% decrease compared to the same period last year [3]

Group 1: Dollar Index and Economic Indicators - The dollar index (DXY00) rose by +0.02% on Friday, recovering from early losses due to reduced liquidity demand from a rally in stocks and higher T-note yields [1] - US personal spending in September increased by +0.3% month-over-month, aligning with expectations, while personal income rose by +0.4% month-over-month, surpassing the expected +0.3% [3] - The University of Michigan's US December consumer sentiment index increased by +2.3 points to 53.3, exceeding expectations of 52.0 [3] Group 2: Inflation Expectations and Federal Reserve - The University of Michigan's December 1-year inflation expectations eased to 4.1%, better than the expected no change at 4.5%, marking the smallest pace of increase in 11 months [4] - The markets are pricing in a 95% chance that the FOMC will cut the fed funds target range by 25 basis points at the upcoming meeting on December 9-10 [4] Group 3: Euro and Economic News - The EUR/USD fell by -0.03% on Friday, as the euro lost modest gains after the dollar's recovery, despite initial strength from positive Eurozone economic news [5] - Eurozone Q3 GDP was upwardly revised, and German October factory orders reported stronger-than-expected results, contributing to the euro's initial strength [5]

Consumer sentiment in the country has been in the dumps for years and is only worsening. Its leaders seem to think offering the right product could unblock demand https://t.co/ermIbTCwt5 ...

Monthly index of consumer sentiment from the University of Michigan rose slightly versus November, but remained much lower than where it began the year. ...

Core Insights - The U.S. holiday shopping season began with record online spending, totaling $44.2 billion during Cyber Week, but underlying economic weaknesses suggest a potential decline in consumer spending [1] - Cyber Monday is projected to be the largest online shopping day of the year, with spending expected between $13.9 billion and $14.2 billion [2] - Black Friday online spending reached $11.8 billion, with Thanksgiving Day at $6.4 billion, and another $11.8 billion over the weekend, exceeding Adobe's forecasts [3] Spending Drivers - Analysts express caution regarding future spending trends, citing higher costs due to tariffs and spending patterns of wealthier consumers as influencing factors [4] - Retailers, including Amazon, have extended significant discounts on essential goods, indicating that many consumers are seeking bargains [5] Optimism Amidst Caution - Some analysts maintain a positive outlook, noting that consumer sentiment has often diverged from actual spending, suggesting that steady spending may continue despite bargain-hunting behavior [6] Retail Earnings Performance - Dollar Tree Inc. reported strong third-quarter results, surpassing estimates and raising profit outlook, with 85% of items priced at $2 or less [7] - American Eagle Outfitters Inc. also reported solid third-quarter results, raising guidance for the fourth quarter and fiscal 2025 [8] - Macy's Inc. exceeded earnings estimates but saw a decrease in net sales, leading to an increased fiscal 2025 outlook [9] Retail Sector Trends - The retail sector shows mixed trends, indicating gradual weakening in household financial stability without a clear decline in retail spending [10] - Positive earnings outlooks from certain retailers highlight potential investment opportunities in retail-focused exchange-traded funds (ETFs) [11]

Consumer sentiment and retail sales have decoupled https://t.co/alFN8zboaQ ...

Consumer Sentiment and Spending Trends - US consumers are showing signs of fatigue leading up to the longest government shutdown, with a worsened outlook impacting the holiday-shopping season [1] - Retail sales increased by a modest 0.2% in September, following several months of stronger spending, indicating a slowdown in consumer consumption [2][9] - Consumer sentiment has dropped to its lowest level in seven months, reflecting concerns about the labor market and overall economic conditions [2] Corporate Earnings and Retail Performance - Recent corporate earnings indicate that consumers are pulling back on big-ticket items and are more inclined to seek bargains, although some retailers like Kohl's and Best Buy have raised their forecasts [4] - Best Buy reported better-than-expected demand during back-to-school shopping and anticipates a strong Black Friday and Cyber Monday, with over half of Americans expecting to spend at least the same amount as last year during the holiday season [5] Economic Indicators and Federal Reserve Outlook - The pre-shutdown economy shows a decline in discretionary spending categories, suggesting a slowdown in consumer momentum [8][10] - The producer price index (PPI) data indicates a modest increase in wholesale inflation, which may influence Federal Reserve decisions on interest rates [7][11] - Policymakers are divided on whether to lower interest rates, with ongoing debates about employment and inflation levels [8][12] Consumer Spending Disparities - Aggregate consumer spending is increasingly supported by wealthier households, while lower- and middle-income groups are facing challenges due to slower wage growth and rising essential costs [10] - There is a disconnect between consumer confidence and actual spending, with indications that incomes may not be rising as quickly as consumer spending suggests [13][14]

Republican strategists have to be scratching their heads tonight, making Zoron Mandani and his communist ways the face of the Democratic party was their top midterm strategy. Trump, at least for now, blew that up tonight. The draconian ice raids have overshadowed any credit Trump could have been receiving for tightening the border.And as for the economy, with or without official data, people know that they are struggling, and many are. But what most people do not realize is that whether their purchasing pow ...