The Conference Board’s gauge decreased to 84.5, from an upwardly revised 94.2 last month. The figure was the lowest since May 2014 and fell short of all estimates in a Bloomberg survey of economists. Mike McKee reports on "Bloomberg Open Interest." -------- More on Bloomberg Television and Markets Like this video? Subscribe and turn on notifications so you don't miss any videos from Bloomberg Markets & Finance: https://tinyurl.com/ysu5b8a9 Visit http://www.bloomberg.com for business news & analysis, up-to-t ...

c45a43530f604d12bcb9a82b5aa6b9f6 n Household consumption growth increased sequentially: According to the NBS quarterly household survey, household disposable income grew by 4.8% yoy (7.8% quarter-over-quarter annualized) in Q4, vs. 4.5% yoy (4.2% quarter-over-quarter annualized) in Q3. Household nominal consumption growth measured in year-over-year terms rose to 4.0% in Q4 from 3.4% in Q3. On a sequential basis after our seasonal adjustment, household consumption per capita in nominal terms gained 7.5% quar ...

Group 1: Corporate Outlook - Executives are expressing concerns that jittery US consumers and geopolitical tensions are impacting demand as earnings season progresses [1][5] - Delta Air Lines and United Airlines have highlighted that geopolitical uncertainty is affecting their profit outlook and travel demand [2] - Consumer staples companies like Procter & Gamble and McCormick report that shoppers are remaining cautious [2] Group 2: Industry Performance - 3M Co. experienced a significant decline after its outlook missed estimates, citing uncertainty in consumer and auto sectors [3] - Fastenal Co. and JB Hunt Transport Services also reported disappointing results, indicating uneven demand and a fragile freight market [3] - Despite these challenges, about 80% of S&P 500 Index members reporting so far have exceeded analysts' expectations [4] Group 3: Economic Environment - Executives note that policy uncertainty and geopolitical risks are overshadowing otherwise positive economic fundamentals [5] - McCormick's CEO mentioned that the market environment is characterized by volatility, inflation pressure, and low consumer confidence [6]

Economic Indicators - The dollar index (DXY00) fell by -0.42% due to a stock rally that reduced liquidity demand for the dollar and euro strength following eased European tensions [1] - US weekly initial unemployment claims rose by +1,000 to 200,000, indicating a stronger labor market than the expected 209,000 [2] - Q3 GDP was revised upward by 0.1 to 4.4% (quarter-over-quarter annualized), surpassing expectations of no change at 4.3% [3] - November personal spending increased by +0.5% month-over-month, aligning with expectations, while personal income rose by +0.3% month-over-month, below the expected +0.4% [3] - The November core PCE price index rose by +0.2% month-over-month and +2.8% year-over-year, meeting expectations [3] Market Reactions - The euro (EUR/USD) rose by +0.54% amid dollar weakness, supported by President Trump's decision to refrain from imposing tariffs on European nations opposing his Greenland acquisition efforts [7] - The Eurozone January consumer confidence index rose more than expected to an 11-month high, contributing to the euro's gains [7] Federal Reserve and Interest Rates - The Federal Open Market Committee (FOMC) is expected to cut interest rates by about -50 basis points in 2026, while the Bank of Japan (BOJ) is anticipated to raise rates by +25 basis points in the same year [5] - The dollar is under pressure as the Fed increases liquidity in the financial system, having started purchasing $40 billion a month in T-bills since mid-December [6] - Concerns exist regarding President Trump's potential appointment of a dovish Fed Chair, which could negatively impact the dollar [6]

Core Insights - Consumer sentiment in the eurozone showed a slight improvement in January, indicating a potential positive shift in confidence levels [1] Group 1: Economic Indicators - The improvement in consumer sentiment may be short-lived due to escalating tensions between the U.S. and Europe, which could impact economic stability [1]

Summary of Key Points from the Conference Call Industry Overview - The focus is on the Chinese stock market and its potential impact on consumer spending, particularly following a significant rally since August 2024, where the market capitalization increased by 55% by the end of 2025 [3][4][5]. Core Insights and Arguments - **Wealth Effect on Consumption**: The report examines whether the wealth effect from the stock market can significantly boost consumption in China. While international research indicates that stock market wealth does increase household consumption, it is generally less impactful than housing wealth due to factors like higher volatility in equity prices [3][5]. - **Demographic Impact**: The recent stock market rally is expected to benefit specific demographics, particularly younger, wealthier, and more educated individuals, as well as residents of top-tier cities. These groups are more likely to experience gains from the equity market [3][4][25][21]. - **Magnitude of Wealth Effect**: Analysis of panel data from 19 provinces suggests a stock market wealth effect of 0.01, meaning for every yuan gained in the stock market, households increase their annual spending by 0.01 yuan. This limited effect indicates that relying solely on the stock market to boost overall consumption may not be effective [3][30][38]. - **Housing vs. Equity Wealth**: The analysis shows that housing wealth has a greater impact on consumption than equity wealth. The ongoing decline in house prices suggests a negative total wealth effect on household consumption overall [3][36][38]. - **Income and Confidence Factors**: Beyond wealth effects, income growth and consumer confidence are crucial for household consumption. Recent data indicates a small uptick in wage growth and an increase in consumer confidence, which could help offset declines in house prices [3][38]. Additional Important Insights - **Investor Characteristics**: As of 2025, households hold approximately 38% of the total market capitalization of the Chinese onshore stock market, which is about RMB 108 trillion, or 80% of China's GDP. However, only 25% of adults invest in equities, compared to over 90% who own real estate [13][36]. - **High-End Consumption Recovery**: There are signs of improvement in high-end consumption sectors, such as luxury retail and gaming revenue in Macau, which may be linked to the wealth effect from the stock market. However, these improvements should be interpreted cautiously as they may not indicate a broader economic recovery [25][38]. - **Regional Consumption Patterns**: The report highlights that a 1 percentage point increase in housing prices raises retail sales by 0.09 percentage points with a one-year lag, while the equity wealth effect is less pronounced, indicating the dominance of housing wealth in driving consumption [30][36]. This summary encapsulates the key findings and insights from the conference call regarding the relationship between the Chinese stock market and consumer spending, emphasizing the importance of demographic factors, the comparative impact of housing and equity wealth, and the role of income and confidence in shaping consumption patterns.

Economic Sentiment - Americans are experiencing heightened anxiety about their economic future, surpassing levels seen during the 2008 financial crisis and the COVID-19 pandemic, attributed to "policy chaos" from the White House [1] - Consumer confidence has reached its lowest level in recorded history, declining for five consecutive months as of December 2025, contradicting claims of a booming economy [2][3] Policy and Leadership - The unpredictability of leadership, including the imposition and reversal of tariffs, is causing businesses to delay hiring and households to postpone major purchases, indicating that "policy chaos is an economic variable" [4] - The administration's conflict with independent economic institutions, highlighted by the firing of BLS Commissioner Dr. Erika McEntarfer, is seen as a critical factor contributing to economic instability [5] Federal Reserve Independence - The Federal Reserve is facing pressure from the administration, with Fed Chair Jerome Powell described as "going to war" to defend the central bank's independence, amidst reported targeting by the Justice Department [7] - There are concerns that these actions could undermine the Federal Reserve's role, leading to an environment of uncertainty where economic stability is influenced by political decisions [8] Market Performance - In 2026, the Nasdaq 100 index has declined by 0.23%, while the S&P 500 and Dow Jones indices have increased by 0.70% and 2.17%, respectively, indicating a lag in tech stocks [9] - The SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust ETF (QQQ) both closed lower, with SPY down 0.49% and QQQ down 1.07% [9]

Group 1 - A CFP Board survey indicates that politics is the top money-related fear for Americans at 46%, surpassing concerns about inflation (39%), market stability (34%), and rising healthcare costs (33%) [1] - Political fears among financial planners are largely driven by uncertainties regarding tax policy changes and the implications of tariffs, particularly related to President Trump's proposed legislation [3] - Consumer confidence has been declining, with the Conference Board's Consumer Confidence Index dropping for the fifth consecutive month, reflecting negative assessments of business and labor market conditions [4] Group 2 - Experts caution that reacting impulsively to political news can harm long-term financial outcomes, emphasizing the importance of avoiding knee-jerk reactions to headlines [5] - Despite increased political stress, 80% of CFPs report that their clients still expect to achieve long-term financial goals, highlighting that financial stability relies on solid planning rather than political forecasts [6] - Successful investors focus on long-term strategies rather than short-term market fluctuations caused by political events, as fundamentals ultimately drive performance over time [7]

Industry Overview - The furniture market is characterized as a discretionary and deferrable expense, making it sensitive to economic conditions and consumer confidence, which have declined in recent months [2] - Retailers are facing pressure to maintain prices due to increased costs from tariffs and other factors, which they must pass on to consumers [3] Company Specifics - Unclaimed Freight, a furniture retailer in Pennsylvania, is closing its last store and has begun a going-out-of-business sale, marking the end of its operations [4][5] - The Pennsylvania branch of Unclaimed Freight is distinct from a Midwest chain with the same name, which continues to operate normally [5] - The store's manager expressed gratitude to the local community for their support over the years, indicating a long-standing presence in the area [6][7]

Labor Market Insights - The labor market appears to be stable with minimal layoffs reported, indicating a contained environment [1] - Continuing claims for unemployment benefits are showing a downward trend, suggesting that unemployed individuals are finding jobs [2] - The unemployment rate is expected to decrease to around 4.4% in the upcoming December report, despite recent fluctuations influenced by government shutdowns [3] Economic Indicators - The Beige Book indicates a weaker trend in growth, inflation, and the labor market, with recent data reflecting lower sales, activity, and investment [5][6] - Consumer confidence has not rebounded, and sentiment remains low due to the impact of the government shutdown [8] - Inflation data is anticipated to rise, particularly with a rebound in rent inflation, leading to a higher overall inflation environment [9] Future Economic Outlook - There is an expectation that economic growth will begin to pick up, with a potential shift in narrative regarding the economy in Q1 [10]