Financial markets were firmly in the red as investors reacted to the Middle East conflict intensifying, with stocks down across Asia and Europe. Gold also fell, which suggests investors are once again liquidating assets that have previously served them well, or they are reacting to a further strengthening in the US dollar.
We have slow growth and inflation that is still a concern from the numbers we got on the economy. The interesting thing about the University of Michigan survey is half of it was taken before the war and then the other half was taken after February 28th and obviously the signs were very different. Half the respondents said that things are really starting to pick up and look good and then all of the survey participants taken after February 28th had started to notice a lot more anxiety and deterioration particularly around their ideas of inflation.
Growth lost momentum in the second half of 2025 as consumers, anxious about tax increases and rising unemployment, held back. There was hope, spurred on by various indicators, that they'd start 2026 with renewed vigour. But the official data, while volatile and prone to revision, suggested the economy stalled in January.
The sharp decline witnessed in U.S. equity markets signals an important shift in global market sentiment, after the Dow Jones Industrial Average lost more than 700 points to close below the 47,000 level for the first time in 2026. At the same time, both the S&P 500 and Nasdaq Composite also fell to their lowest levels this year.
On one hand, the precious metal continues to benefit from its traditional role as a safe-haven asset amid a tense geopolitical backdrop. On the other hand, rising inflation concerns, fuelled by higher oil prices, are affecting the outlook for monetary policy and limiting further upside.
A recent Gallup survey based on more than 20,000 interviews found Americans' optimism about their future personal lives has fallen to a new low. Gallup released findings this week from their National Health and Well-Being Index, which is based on data collected from thousands throughout the four quarters of the year. More than 22,000 interviews were spread across all 50 states and the District of Columbia.
California consumer confidence has plummeted to levels not seen since the pandemic's economic upheaval. My trusty spreadsheet's review of the Conference Board's Consumer Confidence Index for California found that shopper psyche plunged 16% in November from October. This pushed the measure down to a level last seen in December 2020. Much of the index's polling for this report took place before the 43-day shutdown ended on Nov. 12. This Golden State optimism tally is now 25% below its average since 2007.
