Confidence – consumer, small business and CEO – may be a soft or qualitative economic datapoint, measuring how people “feel” about their or their company’s economic prospects (as opposed to a hard or quantitative economic datapoint such as GDP), but it is an important datapoint nonetheless. It’s important because how one feels can have a huge impact on how one behaves from an economic perspective. This brings us to the Conference Board’s U.S. CEO Confidence Survey, a survey we affectionately refer to as “The Sizzler Index.”
When I was a kid growing up in Trenton and my parents were feeling particularly optimistic about our place in the world there was a good chance that we all (I am one of five) were heading to Sizzler for dinner. If you walked into a Sizzler in the late 70s or early 80s, you knew you were entering a special place – you picked your own steak, there was an all you could eat salad bar and you snaked your way through the restaurant cafeteria style; it was a big treat for all of us.
Well, I think about CEOs now the way I thought about my parents then – when they are optimistic, they spend money. According to the latest CEO Confidence Survey, CEOs are more optimistic now than at any point since 2004, with progress on the coronavirus vaccine front and the ongoing reopening of the economy likely helping to push CEO confidence to a near 20-year high. When we marry that optimism with the $6+ trillion in liquid assets that sit on corporate America’s collective balance sheet, it is easy to envision a surge in corporate spending on people and productive assets helping drive a surge in economic growth this year.
The final point we would make is we have historically seen the type of spike in CEO confidence that we just witnessed early in an economic expansion, and it remains our belief that we are early in both the current economic expansion and current bull market.
Tagged: Tim Holland, weekly wire, market perspectives, consumer confidence, CEO confidence