NEW YORK CITY, NY - In closing at 1,981.60 at the end of Tuesday's trading session, the S&P 500 sat within 6 points of its record high. The market has only increased since, rising an additional 4.11 points as of 1:23pm EST to 1985.71. With the way it is currently moving, the market's previous record set on July 23rd at 1987.01 could soon be history.
The Dow Jones has made impressive gains in the past week as well, rising 49.15 points so far during Wednesday morning trading to 16,968.74, less than 32 points from the 17,000 threshold.
A major source of these market gains stem from Tuesday's announcement from the Commerce Department that construction on new U.S. homes had jumped 15.7% in July and that June's construction declines were smaller than previously stated.
“I think investors will be encouraged to an extent by the revisions in the data,” said Andrew Wilkinson, Chief Market Analyst at Interactive Brokers. He also said that the recent reduction in geopolitical tensions “just gives added impetus to the bulls.”
What however does this market boom mean for the produce industry?
It means that confidence in the economy is high. The stock market is one of the best proxies for economic confidence available to analysts and business professionals and a bull market is often closely tied with forward looking optimism about the state of the economy and individual finances.
A market confidence study published by Value Walk on August 14 in the middle of the S&P's rise, revealed that 56% of industry professionals reported high or very high confidence in the market, while only 18% reported weak or very weak confidence.
This is excellent news for the produce industry, because a confident consumer is much more likely to be willing to spend at the retail aisle. In addition rising market confidence has historically led to easier lending practices from banks for business, meaning increased access to financing for America's growers and retailers.
In addition to the gains of the housing market, these recent market moves are also likely a positive nod towards the many Q2 earnings statements that have peppered produce headlines over the course of the past several weeks.
AndNowUKnow has covered the release of the earnings numbers from major industry players such as Sprouts Farmers Market, Loblaw, WhiteWave Foods, Limoneira, and many others, performances that likely played an important part in shaping the market we are currently enjoying.
Whether the S&P eventually breaks into new territory during the rest of the week's trading is something that we can only wait to find out about. But it is certainly reassuring to see this trend taking over as we move closer to the important back-to-school season.
Stay tuned to ANUK for any future updates on the stock market and its implications for the industry.
