Stock options traders can use a wide array of information to attempt to predict market volatility, and something that should be on their radar in the coming months is consumer spending.
According to the U.S. Department of Commerce, household purchases increased the most in three months during February, which pushed U.S. stocks higher as shares rebounded. Experts told Bloomberg consumer spending growth won’t stop, which could be good news for stocks in the next couple of months.
“If consumers go back in and are confident enough to start spending again, that supports earnings and will certainly support the equity market,” Chris Gaffney, senior market strategist at EverBank Financial, told the news source. “I feel like we’re forming a base that we can move high now.”
With the potential for consumer spending to continue to rise, stock options traders may want to use this information to their advantage. Consumer shares were some of the strongest following the Commerce Department’s announcement, as H&R Block Inc and GameStop Corp climbed at least 6.2 percent, which means these types of stocks could be good ones to bet on in the next few months.
One sign that spending could remain strong in the near future is the fact that consumer confidence surged from a 78.3 reading in February to 82.3 in March, according to the Conference Board.
“Consumer confidence improved in March, as expectations for the short-term outlook bounced back from February’s decline,” said Lynn Franco, director of economic indicators at The Conference Board.
Markets are difficult to predict, but information is available to help make educated estimates. Stock options traders can use consumer spending and confidence data to help predict market volatility, and all signs currently point to future increases.
The post Strong Consumer Spending Pushes up US Stocks appeared first on | HY Markets Official blog.
Article provided by HY Markets Forex Blog
