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Personal Income Decreased in February

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Market futures are mixed ahead of the final trading day of the week, with the Nasdaq mildly in the red following a decent bounce-back in regular trading Thursday. The Dow and S&P 500 appear ready to open today’s session in the green, with the Dow +130 in early trading. Both the Dow and S&P 500 have kept their year-to-date gains through the recent market turbulence, while the Nasdaq is holding onto just a 2% gain thus far in 2021.

We see new figures for February’s Personal Income and Consumer Spending, yet another metric tracking things like consumer confidence in the market. After a very strong January on both income and spending, both headlines came down, as expected: -7.1% on the Personal Income side was well down from the slightly upwardly revised +10.1% the previous month, while Consumer Spending reached -1.0%, lower than the -0.8% estimate and the big January upward revision to +3.4%.

The Deflator came in at 0.2%, and +1.6% year over year. Wholesale inventories — a metric that will be closely watched as the ongoing Suez Canal accident blocks shipments the world over — were +0.5%, and appear to be growing, at least as of last month. Of course, these numbers are a look in the rearview, and aside from shipping anomalies we also await the impact of $1.9 trillion coursing through the U.S. economy from the American Rescue Plan.

The market’s overall cautious attitude over the past month or so has given a welcome respite to valuations and forward expectations. Instead of fully pricing in the stimulus package and its varied positive effects expected throughout the economy — without even mentioning that the Biden administration has now doubled its goal to 200 million vaccine doses delivered in the first 100 days of the new White House regime — market participants have given economic reads and analyses a chance to catch up.

Day to day, this may make for frustrating times for investors — especially those recently getting into trading via Robinhood, etc., who had enjoyed the up-up-up early weeks of the year through about mid-February or so. But this more careful mode will hopefully help formulate a more solid base on which to build future market fortunes as the Great Reopening manifests in earnest.

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