There’s good news and there’s bad news, and it’s pulling exchange traded funds (ETFs) in opposite directions this a.m. American consumer confidence is on the mend after slumping in February, but shoppers are still cautious. What does it mean?
The Consumer Confidence Index sank 11 points last month, but rose to 52.5 this month and bested analysts’ expectations. Another measurement that gauges how consumers feel about how they’re doing economically right now showed a slight gain; another measurement showed they’re more optimistic about the next six months. Vanguard Consumer Discretionary (NYSEArca: VCR) is up nearly 0.5% this morning. The consumer discretionary sector will be closely minded by those looking for clues to a recovery. When consumers begin to spend more on “wants” than “needs,” it should be a strong signal of yet more confidence. [Best ETFs to Play International Consumers.]
Mixed news on the home prices front: while prices gained 0.3% in January, the overall rebound in home prices is beginning to slow. One economist went so far as to say it might be a matter of time before a double dip in prices is witnessed. The expiring tax credit is bringing some buyers out of the woodwork and pending contracts are rising across the country. iShares Dow Jones U.S. Real Estate (NYSEArca: IYR) is flat so far today. The real question is what happens when the tax credit disappears; is it enough to continue bringing buyers out? It will be a real clue to the strength and sustainability of the real estate rally if it can stand on its own two feet without government aid. Analysts don’t seem to think we’re there quite yet. [What’s Inside the Homebuilder ETFs?]
It’s the Thailand ETF that’s leading the charge this morning, up nearly 3% in early trading. That may be as a result of the country’s government upping its 2010 growth forecast to between 4% and 5%. Those optimistic numbers were delivered with a cautionary tone; political upheaval could derail that growth. iShares MSCI Thailand (NYSEArca: THD) is up 2.6% so far today. Thailand is Southeast Asia’s second-largest economy and it’s coming off a fourth-quarter growth rate that was its fastest in a decade. [Thailand ETF Investors Focus on Growth.]
For more stories about the global economy, visit our global ETFs category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.