 | September 8, 2009 - 'Weighted Composite Index' Stabilizes in 104-105 Zone:
During the first week of September our 'Weighted Composite Index' leveled off and stayed in the zone between 104 and 105, representing year-over-year increases in Consumer interest of between 4% and 5%. The index peaked at over 110 in the middle of August, and has since declined slightly over 5 points. These changes in the day-to-day index can be seen in the Weekly Weighted Composite Index (which can be viewed in our Members Area page) as well, which peaked during the week ending August 18th, 2009. Both the multi-week decline and the recent leveling off have been visible in nearly all of our sector indexes, with the Automotive and Housing indexes - which had been carrying the composite to its mid-August peak - having slipped back into more normal territory. In fact, by September 8th the Housing Index had dropped below 115 for the first time since the very beginning of August, a sign that the new Housing boom may be cooling off at least a little - if year-over-year growth of 15% can be considered 'cooling'!
The two weakest sectors continued to be the Recreation and Retail sectors, although at the end of the prior week they both were strengthening from short term bottoms reached earlier in the week. The remarkable story in the Retail sector has been the decline in the Technology Stores Sub-Index, which had dropped precipidously. But all of the Retail sub-indexes (except Book Stores) have been in a recent funk, as Consumers seem to have been more interested in longer term spending (e.g., Automobiles and Housing) than shorter term impulse buying (e.g., Recreation and Technology).
Although the Financial Index weakened at the end of the prior week, it still remained above 106. This continued year-over-year growth came from two main factors: 1) continued strength of Consumer interest in both Mutual Funds and (especially) Brokerage House products, and 2) significant and continued reduction in concerns about personal or mortgage debt problems. Consumer concerns about foreclosures and credit defaults are inversely factored into the Financial Index, and as can be seen from the sub-index graphs these concerns have dropped substantially since early July to levels not seen since early January, 2009. If nothing else this may mean that Consumers are sensing a little less fear about their personal financial lives.
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