Here’s another question analysts and economists have been pondering: Will the Federal Open Market Committee raise rates in June? The probability jumped from 4 percent two weeks ago to 30 percent last week, according to CNBC.
Consumers spent more in April than they have in more than a year. Commerce Department data showed April’s retail sales improved by 1.3 percent month-to-month and 3.0 percent year-to-year. Yet, several large department stores reported poor first quarter earnings and weren’t optimistic about the future, according to Barron’s.
Some see current lackluster economic data as a harbinger of trouble. Last week, Barron’s cited an expert who was concerned about employment data. “…It could be a sign of trouble…Specifically, falling profit margins will put pressure to trim costs and head counts later this year and into 2017, which would slow consumer-spending growth.”
Current levels of pessimism might have inspired Sir John Templeton, a renowned contrarian investor. He once said, “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.”
You’d think they’d be right half the time, but an organization that tracked forecasting results through 2012 found expert’s forecasts were correct about 47 percent of the time.