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CEO confidence in the economy has cratered, while consumers believe things are OK – CNBC

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5 years ago

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Consumers and corporate chieftains are heading in the opposite direction, with one group still brimming with good thoughts about the future and the other sure that tougher times are coming.

Recent surveys exemplify a trend that began a few years ago and has accelerated over the past several months. The gap between sentiment is broad and growing, though there’s some reason to believe that a change could be coming.

Chief executive officers and chief financial officers see an economy that is heading into a slowdown if not an outright recession. Recent surveys show that CEOs believe recession is the biggest risk in 2020, while almost all CFOs surveyed by Deloitte think the economy is likely to at least slow.

They view the U.S.-China trade war, a slowing global picture and increasing headline political risks as threats to the decadelong expansion that is the longest in American history.

But consumers are in the opposite camp.

While sentiment has leveled off from record highs, they still view conditions as generally positive. Spending remains strong even amid a growing savings rate, as consumers remain the beneficiary of a 50-year low in the unemployment rate and historic highs for the stock market.

The difference could be a simple matter of perspective.

Whereas consumers tend to focus more on conditions closer to home, corporate executives take a more global view. The tariff exchange coupled with a more pessimistic view on global growth has brought down executive hopes for the future.

“One of the reasons corporate confidence has fallen is because the global economy has been weak, and that preceded the trade spat,” said Joseph LaVorgna, chief economist for the Americas at Natixis. “We could be in one of those situations where CEO confidence is just reflective of what’s been a weaker global economy but not necessarily a weaker U.S. economy.”

Even the global picture may be getting better.

The U.S. and China are about to sign off on the first phase of a trade deal that at least will forestall any further aggression, eliminating one key unknown. Estimates also are improving, with the World Bank on Wednesday modestly upgrading its 2020 global GDP forecast to 2.5%.

Closer to home, fourth-quarter growth is now likely to be 2.3%, according to the Atlanta Fed, which in November had a 0.3% projection.

Sentiment surveys often are seen as a leading indicator. But with conditions improving, the downbeat outlook from corporate executives might instead reflect rearview mirror thinking.

LaVorgna thinks an upswing in housing and a bottoming in the beleaguered manufacturing sector could be key.

“Consensus is way too negative for 2020,” LaVorgna said. “These things [housing and manufacturing] have a tremendous ability to reinforce confidence on the upside. When that happens, you’ll see CEO confidence on the upturn.”

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Economy

S&P/TSX composite gains almost 100 points, U.S. stock markets also higher

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2 days ago

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September 13, 2024

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TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.

The S&P/TSX composite index closed up 93.51 points at 23,568.65.

In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.

The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.

The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.

The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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Economy

Statistics Canada reports wholesale sales higher in July

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2 days ago

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September 13, 2024

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OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.

The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.

The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.

The personal and household goods subsector fell 2.5 per cent to $12.1 billion.

In volume terms, overall wholesale sales rose 0.5 per cent in July.

Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.

This report by The Canadian Press was first published Sept. 13, 2024.

The Canadian Press. All rights reserved.

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Economy

S&P/TSX composite up more than 150 points, U.S. stock markets mixed

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3 days ago

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September 12, 2024

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TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 172.18 points at 23,383.35.

In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.

The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.

The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.

The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.

This report by The Canadian Press was first published Sept. 12, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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