I came across this article on Seeking Alpha recently which talks about the concept of using consumer spending to better understand the movement of the stock market. If you are a paid subscribed member of Seeking Alpha, you may like to read the linked article in full. In this post, I will be highlighting a few key concepts related to this and provide a concise summary to this concept exploration.
The consumer spending accounts for 70% of the US Gross Domestic Product (which in turns describe the economy). Hence, how the US consumer spends seems to be able to have a huge impact on the movement of the stock market ultimately since that is a usually a byproduct of the economy. Is this really the case? Let’s find out a bit more as described in the article.
There are a few ETFs which describe the consumer spending. In this study, we will be looking