Tags: super bowl | advertising | recession | economy | trump

Super Bowl Ad Sellout a Good Sign for Economy — and Trump

Super Bowl Ad Sellout a Good Sign for Economy — and Trump

By Monday, 25 November 2019 06:01 PM Current | Bio | Archive

A new indicator of the non-existent recession just came in on Monday: The Wall Street Journal reported that its same-owner sibling, Fox Broadcasting Co., has sold out all ad inventory for Super Bowl LIV (54), set for Hard Rock Stadium in Miami on Feb. 2.

Thirty-second spots sold for as much as $5.6 million, up 6% from a year ago, reports WSJ advertising editor Suzanne Vranica (@VranicaWSJ). It is the earliest sellout in nine years, Adweek reports.

Ad spending is an early indicator of where the biggest and richest brands in the world are betting the economy is heading, and it is one of the first things they cut when they fear a recession is approaching. It becomes part of the downward slide: just when marketers should be advertising more to coax wary consumers, they cut back because of their own fears. This can hurt sales, and the contraction continues.

So, the Super Bowl sellout is good news for the economy and the markets — and bad news for Democrats, if it still holds true that, when it comes to winning elections, “It’s the economy, stupid,” as Clinton advisor James Carville put it so famously and plainly.

Recessions hold a certain fascination for me, as an unrelenting optimist, because they are so emotional and psychological in their origins. They thrive on negative sentiment and feed on fear. The media and our political leaders can add to this downward spiral in spirit, and then the slowdown can deepen — all because of how we feel.

That is why the intrepid investor — and the intrepid voter — should maintain a Recession Watch, keeping close tabs on the indicators that tell us whether a downturn is ahead.

I am better at gauging the chances of recession than I am at making political prognostications. This, given my previous column predicting Michael Bloomberg would never really run for the Democratic nomination, and now he has announced his formal candidacy.

Here is my origin story as a recession buff.

At 8 o’clock at night on June 25, 2009, in the shadow of the Great Meltdown, I opened my nightly show on CNBC by making a bold prediction: the Great Recession ends right here, right now. The Dow stock average closed at 8472 that day.

In building my case, I offered a passel of data points, but my main appeal was to emotion: the economy will get better if we feel better. And too many experts on-air were all Eeyores, too afraid to see hope.

Never got much credit for being right on that one. (And don't we all want credit for something?) In part, that is because, on the same night that I declared the Great Recession to be over, headlines moved saying that Michael Jackson had just died of a drug overdose. Tragic.

A year later, the National Bureau of Economic Research declared that the Great Recession had, indeed, ended on June 30, 2009. It didn’t feel that way to many people, and it was one of the pokiest recoveries on record. Hopelessness takes a while to fade.

Here are a few more reasons why chances of an imminent recession are low:

* The stock markets remain near all-time highs, despite impeachment hearings and the trade war. All three major indexes — the Dow Jones average, the Nasdaq, and the S&P 500 — closed on Monday a new record highs. Yet again. The markets predict conditions six to 12 months from now, as I noted in this earlier column.

* The consumer is in fine shape. Consumer spending makes up 68% of the U.S. economy, and forecasters are predicting strong Christmas sales. This is in stark contrast to the bleak sentiment we see in impeachment hearings and in Democratic debates.

* In November, the University of Michigan’s consumer sentiment rose to 96.8, the 30th month in the past 35 months that it was at 95.0 or higher. This stretch of optimism is the best on record since year-end 2000.

* In the October survey for the Conference Board’s consumer confidence index, the present-conditions index rose, and almost 40% of consumers say business conditions are “good,” while only 11% say conditions are “bad.” Almost 50% of consumers say jobs are “plentiful,” and only 11% say jobs are “hard to get.”

* The two most important recession indicators are GDP growth and job growth. In the third quarter growth was tepid at 1.9%, and it will rebound. Unemployment is at record lows. We have more job openings (7 million) than people who are unemployed (5.8 million). In the October jobs report, 128,000 new jobs came in, 70% higher than expectations, with almost 100,000 jobs added to the estimates for the prior two months.

* A much-watched warning signal, the “inverted yield curve,” flashed and disappeared. Recession fears rose in mid-August because long-term bond yields, which usually are higher than short-term yields, fell briefly below short-term rates. This “inverted yield curve” has predicted many previous recessions. On August 14, the yield on 10-year government bonds fell to 1.623%, vs. the two-year rate of 1.634%. This lasted all of several hours. Market reaction: so what?

Dennis Kneale is a writer and media strategist in New York. Previously he was an anchor at CNBC and at Fox Business Network, after serving as a senior editor at The Wall Street Journal and managing editor of Forbes. He helped write “Wealth Mismanagement: A Wall Street Insider on the Dirty Secrets of Financial Advisers and How to Protect Your Portfolio,” by Ed Butowsky, published in August 2019 by Post Hill Press. To read more of his reports — Click Here Now.

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Ad spending is an early indicator of where the biggest and richest brands in the world are betting the economy is heading, and it is one of the first things they cut when they fear a recession is approaching.
super bowl, advertising, recession, economy, trump
Monday, 25 November 2019 06:01 PM
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