Global Consumer Sentiment Update

The November readings of the Thomson Reuters/Ipsos Consumer Sentiment indexes revealed a picture of solid consumer confidence at a global level. The global GDP weighted reading was up +0.13pts to 57.76 with Developed Economies up +0.08pts to 54.04 and Emerging Markets up +0.17pts to 61.35. This follows on from a strong round of PMI data for October – the chart below shows the global manufacturing PMI accelerating alongside the upturn in the consumer sentiment indicator. That both consumer and manufacturing confidence is on the rise says something about the strength of the global economic upturn.

The rise of consumer sentiment has coincided with a strong run in global stock markets. This is an important observation because consumer sentiment is both affected by rising stock prices, and a reflection of the economic currents which drive corporate earnings.In this respect it serves as a good confirming indicator for global equity strategy, but should also be on watch for any divergences or indeed a lack of confirmation in the direction of global stock prices.

While leading and lagging at different times both consumer sentiment and manufacturing confidence have risen to strong levels; reflecting a strengthening global economic cycle.

The steady march higher in the global consumer confidence reading has been met with a steady rise in the MSCI All Countries World Index (global equities). It serves as a good confirming economic indicator for global equity strategy.