Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Shrug Off Dwindling Consumer Confidence

Stock-Markets / Stock Markets 2011 Apr 05, 2011 - 05:58 AM GMT

By: Money_Morning

Stock-Markets

Best Financial Markets Analysis ArticleJason Simpkins writes: High prices for commodities last month sent consumer confidence spiraling to a three-month low, but that doesn't necessarily mean the stock market will suffer.

On the contrary, stocks over the past two years actually have performed remarkably well in the months following sharp declines in consumer confidence.


In the four prior instances since the start of 2009 in which consumer confidence fell by more than 10% in a month, the Standard & Poor's 500 Index rose an average of 7.2% the following month with positive returns every single time, according to Bespoke Investment Group.

That makes March's steep decline in consumer confidence somewhat easier to stomach. The Conference Board's confidence index fell 11.9% in March to a three-month low of 63.4.

"Higher prices at the gas pump and at the grocery store have rattled consumers," Tim Quinlan, an economist at Wells Fargo Securities LLC told Bloomberg News.

Food prices soared 3.9% last month - the biggest gain since November 1974 - according to the Labor Department's producer price index. Meanwhile, oil prices are up 11.5% from where they ended February. The average price for a gallon of regular gasoline was $3.662 yesterday (Monday), according to the AAA Daily Fuel Gauge Report. That's up from $3.493 a gallon a month ago and $2.826 this time last year.

Furthermore, higher commodities prices have raised input costs for many manufacturers and producers, which are now passing those costs onto consumers. Consumers, in turn, have cut back on spending and ramped up their bargain hunting, raising concerns that less spending will stall the economic recovery.

"Consumers' inflation expectations rose significantly in March and their income expectations soured," said Lynn Franco, director of the Conference Board's consumer research center. That "will likely impact spending decisions."

Still, not every analyst is worried. In fact, many believe that while March's data was weak, it's only natural to experience such hiccups coming out of a recession.

"The economy is still recovering from a substantial crisis. You've got some indicators pointing to faster growth but there are still areas of weakness, especially housing,"

Vassili Serebriakov, senior currency strategist at Wells Fargo told Reuters. "As far as consumer confidence, it all hangs on how long the Mideast unrest will last and how high oil prices will go. The good news is that despite all the negative news headlines, equity markets have been tremendously resilient, so that will help confidence going forward."

And, again, spiraling consumer confidence traditionally hasn't been a very good barometer of where stocks are headed.

"We've seen sluggish consumer confidence in the early 90s, and markets continued to rally higher, so there was an elongated bottoming there," said Steve Goldman, a market strategist at Weeden & Co. "So today's data is probably not going to have much (impact)."

The S&P 500 so far this month has traded mostly sideways.

Source : http://moneymorning.com/2011/04/05/...

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in