Whether you look at Consumer Confidence, Homebuilder Confidence or Small Business Optimism, the American people are riding an unparalleled post-Election Day wave of euphoria. Let's call it "Trumphoria." The question now is, will will it hold?
We think so (at least until GDP is reported for the first quarter of 2017, but that's not until April).
Here's a brief recap of recent economic exuberance via Hedgeye U.S. Macro analyst Christian Drake in this morning's Early Look.
1. Homebuilder Confidence
The National Association of Homebuilder HMI jumped +7pts to a fresh cycle high of 70 in December, Builder Confidence is no exception.
The +7 pt increase in the headline reading marks the largest sequential increase in 4 years while the +9 pt levitation in the Expectations series was the largest since the inflection off the housing market trough in 2012. As can be seen in the chart below, historically, sequential increases of similar magnitude have typically been confined to early, post-recession bounces off of confidence troughs and are a particular rarity in late-cycle, rising rate environments.
2. Consumer Sentiment
The University of Michigan’s Consumer Sentiment index popped to 98.0 in early December vs. 93.8 in November.
3. Consumer Confidence
The Conference Board’s November Consumer Confidence reading of 107.1 was +8.6% higher than the October reading of 98.6. That’s a new cycle and year-to-date high!
4. Small Business Optimism
Small business optimism, as relayed through the NFIB Outlook/Expectations Index, was up the most, sequentially, since 2009!
