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Consumers are feeling better about inflation, but low-income earners are concerned the economy is turning, a national survey on public perceptions of the economy showed.
The Michigan Consumer Sentiment Index continued to tick lower in July. It’s the lowest level since November 2023, and it reflects four consecutive months of decline for the widely-followed measurement.
Survey director Joanne Hsu notedthat consumer sentiment over the last three months has remained “virtually unchanged.”
“Sentiment has lifted 33% above the June 2022 historic low, but it remains guarded as high prices continue to drag down attitudes, particularly for those with lower incomes,” Hsu wrote. “Labor market expectations remain relatively stable, providing continued support to consumer spending.”
The report highlighted the differences between high- and low-income earners, wrote Oren Klachkin, a financial market economist at Nationwide.
“In short, high-income earners are generally enthusiastic while lower-income cohorts are feeling the heat,” Klachkin wrote. “Lower-income households will suffer the greatest pain during the upcoming economic slowdown since they haven’t benefited from the run-up in stock prices and housing values to help them weather the pending slowdown in income growth.”
The public continues to feel better about inflation, with year-ahead expectations for price increases coming in at 2.9%, dropping for the second straight month, while expectations on price growth for five years out remained at 3%, still above the pre-pandemic range. But while inflation expectations improved, high prices continued to weigh on perceptions about the economy.
“Despite slowing inflation, consumers appear to remain unhappy with the high level of prices generally, and food prices in particular,” wrote Scott Hoyt, analyst at Moody’s. “Interest rates remain painfully high and unlikely to return to pre-pandemic levels in the foreseeable future. Homes are unaffordable for many.”
The Federal Reserve closely follows consumer inflation expectations, factoring in public sentiment when making decisions on interest rate levels.
“Gradually diminishing inflation should minimize the risk of an unexpected pop in expectations and help set the stage for a September Fed rate cut,” Klachkin wrote.
While the survey has shown elevated consumer pessimism for several months, there are reasons to expect confidence to improve, said Hoyt.
Gas prices should remain near current levels, interest rates and price levels are trending lower and the labor market is slowing but still strong.
“Given the still-low level of this index, large gains seem likely at some point,” Hoyt wrote. “Though confidence should trend higher, the timing of gains is highly uncertain.”
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Uche Jombo’s "Onye Egwu" Movie Sparks Nationwide Reactions Amidst Protests. Showing Now On Amazon Prime Video "Onye Egwu "
The Federal Government has announced plans to sell $500 million of dollar-denominated securities in the domestic market in a bid to strengthen the Naira.
This was disclosed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, at an event in Abuja on Thursday, July 25.
The minister said the move is expected to attract investment from Diaspora Nigerians and Nigerians with savings held abroad and will take place in three to four weeks’ time.
According to him, “We have an open exchange rate system, it’s not illegal and so we have the issuance of a dollar-denominated security, not depending on the financial architecture of the Western world, not depending on the kind of architecture that you use to raise Eurobonds.
We’re using the Nigerian financial system, the Securities and Exchange Commission (SEC), the banking system, the investment bankers to issue $500 million in the first instance that will be available and will attract foreign currency held by Nigerians abroad and anybody else who buys into the macroeconomic reform efforts of President Bola Tinubu.
That issue is a challenge to the best and the brightest in the financial markets. It is due to open in the next three to four weeks maximum.”
The government is also not considering a eurobond offering, focusing on the dollar bond instead.
“Eurobond is one of the options that we have, the markets are open to us, our ratings and our performance merit it. But we prefer in the first instance to challenge Nigerians to come home with their money and be part of the Nigerian reform success story,” he said.
A 300-level Computer Science student of Abubakar Tafawa Balewa University (ATBU) Bauchi, Naja’atu Salisu, has passed away after she was found unconscious in the bathroom on Friday morning, July 26.
It was gathered that Naja’atu entered the bathroom in the female hostel at the Gubi campus of the university to have a morning shower and prepare for lectures but was later found lying unconscious on the floor of the bathroom.
One of her roommates who spoke with Leadership said: “She had done every routine in preparation for the morning class before going into the bathroom. She brought wears that she planned to wear to the class and kept them on the side of her bed.”
Confirming the incident, ATBU Spokesperson, Zailani Bappa, said she was rushed to the university’s clinic medical attention, but medical personnel were unable to find a vein on her body.
“Having noticed this, Naja’atu was rushed to the Trauma Centre of Abubakar Tafawa Balewa University Teaching Hospital where she was certified d£ad by medical doctors,” he said.
Newell Brands (NWL) beat second-quarter expectations and upgraded its full-year guidance after the company made “significant progress" on its turnaround, sending shares of the Yankee Candle owner up 40% on Friday.
The parent of Crock-Pot, Elmer’s and Sharpie now projects adjusted earnings per share (EPS) of 60 cents to 65 cents in 2024, up from a previous estimate of 52 cents to 62 cents. Newell also narrowed its net sales growth range to declines of between 6% and 7% from 5% to 8%.
Friday's jump pulled the company's shares a few points into the green year-to-date, though still well off highs seen in 2021.
"Over the past year we have improved the rate of year over year core sales growth from down 15% in the first half of 2023 to down 9% in the back half of 2023 to down 4.5% in the first half of 2024," CEO Chris Peterson said on the company’s earnings call.
The company expects its realignment to be “substantially implemented” by the end of 2024 and generate $65 million to $90 million in annualized savings. The company reported less outstanding debt and more cash or equivalents year-over-year.
"We are making significant progress,” Peterson said in a statement. “Since implementing the new corporate strategy, we have taken decisive actions that have improved the company's top line trajectory, driven significant gross and operating margin expansion, delevered the balance sheet and improved cash flow performance”
In the second quarter, Newell posted net income of $45 million, or 11 cents per share, more than double the $18 million, or 4 cents per share, it reported a year earlier. Net sales fell nearly 8% to $2 billion.
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Amazon (AMZN) reports earnings after the bell Thursday, with investors watching the results after a tech-industry selloff dragged heavyweights like the Magnificent Seven lower this week after earnings from Google parent Alphabet (GOOGL) and Tesla (TSLA) disappointed.
Analysts expect total revenue for the tech and online retail giant to rise about 11% from the second quarter last year to $148.68 billion from $134.38 billion last year. Net income is projected to jump 65% year-over-year to $11.13 billion from $6.75 billion in the year-ago quarter. Amazon has worked to reduce costs by making its delivery network more efficient over the past year.
In Amazon's last earnings report in April, growth from the company's advertising segment and revenue from Amazon Web Services (AWS) and the company's efforts in artificial intelligence (AI) boosted Amazon's earnings.
Bank of America analysts wrote Friday that they believe growth in AWS demand could power its revenue above estimates, as Amazon has expanded the range of products available through its Bedrock platform.
Amazon's advertising revenue is likely to grow in the quarter and the second half of the year as the rollout of ads on Prime Video continues, analysts said. Wedbush analysts said 87% of advertisers who advertise on Amazon said in a recent survey that they increased spending in the second quarter compared to last year, and 91% said they plan to increase their ad spend in the third quarter.
While the financial performance of Prime Day will impact Amazon's third-quarter earnings, investors may be looking for additional clues about how successful this year's 48-hour sales event was. Data from Adobe Analytics found that the event generated an estimated $14 billion in online spending across U.S. retailers, split almost evenly over the two days.
Bank of America analysts said their estimates put Prime Day's gross merchandise value around $13.4 billion, up 10% from last year and better than their projections of a 7% bump, also noting that a record number of Prime signups could help Amazon continue to gain market share in online retail.
Amazon stock rose 1.5% on Friday, leaving it up about 20% for the year so far.
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