The superb performance of the U.S. stock market continues to offer optimism that the so-called “wealth effect” could continue to boost boat sales in 2013.
The most recent good news was Thursday’s record close of the Standard & Poor’s 500-stock index, the most widely followed barometer of the U.S. stock market, at 1,569.19, topping its previous peak, which had stood since Oct. 9, 2007.
The current performance of the U.S. stock market would have seemed improbable during the depths of the financial crisis after the October 2008 market crash, given that the nation led the global economy into recession, according to a report in today’s New York Times.
Economists credit the relative speed with which the U.S. government and the corporate sector responded to the causes of the 2008 crisis for the current measured rebound.
“The U.S. addressed the problems of the financial crisis faster and with much more ferocity than the rest of the world,” Edward M. Clissold, a market strategist at Ned Davis Research, said in the Times article.
Beyond the stock market, the marine industry can take heart in reports that U.S. consumer spending in February climbed by the most in five months as incomes rose, signaling that an improving job market is spurring demand. The term “wealth effect” refers to an increase in consumer spending that accompanies a rise in perceived wealth.
“The economy is in a very good place right now ahead of the fiscal restraint,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. In New York, said in a Bloomberg article today. “This recovery is sustainable. Consumers are in the driver’s seat.”
A report today by CNBC notes that the two strongest equity sectors that have fueled the S&P 500's recovery are stocks based on consumer staples and consumer discretionary spending. So-called discretionary and staples stocks have posted 14 straight quarters of earnings growth, the longest streak among the 10 S&P 500 sectors.
Stock markets in the U.S. are closed today in observance of Good Friday.