https://wellsfargo.bluematrix.com/links2/html/1c36becb-daf5-4bd5-a77f-189fe7473d4e
July 18, 2023
The Summer Sun Warms the Spirits
After 17 Negative Months, the Animal Spirits Index Turned Positive in June
by Azhar Iqbal and Nicole Cervi, Wells Fargo Economists
- The Animal Spirits Index (ASI) jumped to 0.28 in June, up from -0.19 in May. The positive outturn broke a 17-month streak of negative values.
- All five components of the ASI increased in June.
The ASI consists of five indicators: the S&P 500 Index, the Conference Board’s Consumer Confidence Index, the yield curve (the spread between the 10-year and three-month Treasury yields), the VIX Index and the Economic Policy Uncertainty Index. The policy uncertainty and VIX indices inversely affect the ASI. In other words, a rise in uncertainty or volatility decreases the index, while a fall increases the index, all else equal… Mirroring the broad-based improvement in financial markets, the Consumer Confidence Index jumped seven points in June to its highest level in 17 months…[end quotes]
Charts are in the linked article.
This reinforces the sunny forecast of my METAR based on the Control Panel. There’s no question that the Fed will raise the fed funds rate at their next meeting since the economy and investors have plenty of altitude under their wings.
Wendy
