LIVE MARKETS-Consumer sentiment has improved but is still weak: LSEG

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CONSUMER SENTIMENT HAS IMPROVED BUT IS STILL WEAK: LSEG

Consumer sentiment improved in the latest LSEG/Ipsos Primary Consumer Sentiment Index from the prior reading's sharp decline to a 15-year low. But the firm, which carried out the survey October 23-29, noted that the index is still about two points lower than its reading from this time last year.

"Despite this month’s uptick, the index sits well below its reading to begin the year. Inflation, largely driven by higher energy costs, continues to persist, and there appears to be no end in sight to the war. Cost-of-living frustrations likely played a large role in this month’s historic midterm elections," said Johnny Sawyer, senior research manager at Ipsos.

"It remains to be seen if the new Congress can improve the broader economic environment quickly, or if the current state of depressed consumer confidence continues well into 2027.”

And Jharonne Martis, director of consumer research at LSEG, chimed in to note that against that backdrop, "retailers’ Q3 earnings outlook paints a more cautious picture."

"Following robust earnings growth of 71.7% in the second quarter, analysts now expect growth to moderate sharply to 8.0% in Q3, even as revenue is projected to rise 6.2%," wrote Martis.

"While this slowdown partly reflects a normalization from unusually strong Q2 results, it also raises concerns about mounting merchandise, labor and operating costs. With consumers becoming increasingly price-sensitive, retailers face the challenge of balancing higher expenses with competitive pricing, making it more difficult to protect profit margins," she added.

(Sinéad Carew)

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