The conference board released today the consumer confidence index which marked a downward correction in the households’ confidence. The July index came at 92.6 from 98.3 in June.
This was mainly due to the rising numbers of new coronavirus cases, along with continuous high initial jobless claims.
Generally, many economic surveys including consumer sentiment and unemployment are pointing to a slow path of economic recovery, as well as the health situation in the United States, and in many other parts of the world, with the continuous spread of the disease, all that makes the V-shaped recovery a more remote scenario, and that the recovery journey may take much longer time to reach at least pre-pandemic level.
The DOW JONES has slightly weakened since Thursday 23d along with the S&P 500 and NASDAQ, after US china conflicts, and new round of fiscal stimulus negotiations and proposal today.
Overall, we still believe that recent correction in major U.S indices is a necessary step before continuing their upward path.
And it is a great opportunity for traders and portfolio managers to reformulate their portfolios for the third quarter and beyond. And as we saw today, the decline in Gold prices indicated that money managers are reducing their positions in GOLD, leaving some free margin to bigger equity exposure.