Enough with The Negativity! 3 Reasons to Be Positive Looking Forward

Amidst the coronavirus pandemic over the past few months, Americans’ mood and outlook have certainly soured. And for good reason; millions of Americans are unemployed and struggling to make monthly payments on their mortgages, vehicles and credit cards.

The reality is that the economic data will remain abysmal in the near-term, especially in the second-quarter. But we all know this, it won’t be a surprise.

So, rather than focus on all the short-term negatives, why not take a more positive stance looking forward?

According to the Mayo Clinic, a more optimistic outlook can have a positive impact on your health. In fact, optimists often benefit from lower stress levels, improved cardiovascular health, stronger immune systems and lower rates of depression.[1] With this in mind, let’s consider three reasons why we can be positive looking forward.

First, consumer confidence is actually improving.

The Conference Board recently reported that the overall Consumer Confidence Index stabilized in May after the Present Situation Index plummeted almost 100 points during the pandemic.[2] With many states reopening, the Expectations Index, which is based on short-term outlooks, climbed from 94.3 in April to 96.9 in May.

Many Americans are now more optimistic that the economy will improve dramatically in the second half of 2020. The Expectations Index showed that 43.3% of consumers look for better business conditions over the next six months, up from 39.8% in April.[3]

As you may know, consumer spending accounts for about 70% of U.S. GDP growth. So, as Americans grow more optimistic and confident that the U.S. economy bounces, we’ll likely see consumer spending rebound helping economic growth recover.

Second, the U.S. housing market is bouncing back strongly.

In fact, April sales of new homes defied expectations. According to the U.S. Census, new homes sales soared nearly 1% in April.[4] Of course, that’s not a huge increase, but when you consider that economists were looking for a 22% plunge in new home sales, that’s a very positive development.

In addition, applications for home mortgages have climbed for six-consecutive weeks. The Mortgage Bankers Association recently reported that its seasonally adjusted Purchase Index jumped 8.6% over the previous week.[5] Home mortgage applications are now up 54% since April.

So, it’s not too surprising that the National Association of Home Builders recently noted that, given the April demand for new homes, the housing market could lead the U.S.’s economic recovery.[6]

And, third, the broader market has rallied more than 30% from the mid-March lows.

Since March 23, the S&P 500 has climbed about 34%, while the Dow has soared more than 35%. The recent surge has been driven by a combination of: States reopening, coronavirus vaccinations starting clinical trials, and countries reopening their borders to foreign visitors.[7]

Traders’ returning to the New York Stock Exchange on May 27th was a very positive development helping buoy confidence.

Overall, there’s no denying that we’re living in uncertain times. No one has a crystal ball to predict where the U.S. economy and stock market will land by year-end. But, if you continue to focus on all the negative headlines and expect the worst, you’re overlooking a lot of positive developments—and that could leave you sitting on the sidelines as fortunes are being made. It may not be good for your health.

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[1] https://www.mayoclinic.org/healthy-lifestyle/stress-management/in-depth/positive-thinking/art-20043950

[2] https://www.prnewswire.com/news-releases/the-conference-board-consumer-confidence-index-stabilizes-in-may-301065195.html

[3] https://www.prnewswire.com/news-releases/the-conference-board-consumer-confidence-index-stabilizes-in-may-301065195.html

[4] https://www.cnbc.com/2020/05/26/new-home-sales-rose-slightly-in-april-as-prices-fall.html

[5] https://www.reuters.com/article/us-usa-economy-housing/us-mortgage-applications-rise-for-sixth-straight-week-idUSKBN2331IX

[6] http://nahbnow.com/2020/05/in-a-positive-sign-new-home-sales-hold-steady-in-april/

[7] https://finance.yahoo.com/news/stocks-soar-nyse-trading-floor-133120175.html