Your Tuesday Blip 9/29/20

Your Tuesday Blip 9/29/20

Markets pulled back from yesterday’s uptick as investors consider the slow progress on a new stimulus package and await tonight’s debate. At the close the Dow was down 131 points at 27,452. Trading volume was down considerably from yesterday’s level. IBD has shifted to “market in correction” mode and with the election looming it seems investors are willing to play it safe.
September Consumer Confidence rose to 101.8 from a prior reading of 84.8 and beat guru estimates calling for a reading of 88. This is the largest jump in 17 years. Respondents who feel that business conditions are good increased from 16% to 18% while those that feel they are bad fell from 43% to 37%. Future expectations aka “hope” also rose from 86 to 104 meaning that folks are feeling better about the days ahead.
While consumer confidence grows Wall Street biggies are lowering GDP growth estimates to reflect a lack of additional stimulus from Uncle Sugar. Goldman, JP Morgan and Morgan Stanley all have recently lowered GDP estimates and now expect an economic contraction this year in the range of negative 4.2% to negative 2.7%.
Thor Industries reported earnings late yesterday and the results crushed guru estimates as the company benefitted from the road trip craze which swept the country in the wake of the pandemic. Revenue came in flat while net income jumped 28%. 50% of purchases were from first time RV buyers and Thor’s order backlog rose 186% this year. The RV trend received a boost from Uncle Wallet after congress passed the Great American Outdoors Act in August designed to spruce up parks and campgrounds. Thor said that going forward the outlook for both US and European sales looked good and dealer inventories remain at historically low levels. Demand for campers and RVs is expected to grow 19% in 2021.