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Consumer Confidence

Sep 08 2023

Confidence Cracking?

  • Sep 8, 2023

After hovering near the highs of the post-COVID expansion, in August, the Present Situation Index turned down, and is now below its 10-month moving average for the first time since December. When this measure is at a high level, but declining (like now), it is the worst backdrop for stock performance.

Mar 07 2023

The Late-2022 Recession That Wasn’t

  • Mar 7, 2023

Our Treasury Secretary (and former Fed Chair) has described the JOLT survey (Job Openings and Labor Turnover) as her favorite labor market indicator. We don’t know why: It’s a good survey, but similar figures become available about two months in advance of JOLT.

Mar 03 2023

The Job Market Just Rescinded A Recession Signal

  • Mar 3, 2023

For those disappointed that February’s employment report won’t be released until March 10th, we have something to consider in the meantime.


Dec 13 2022

Confidence & Causality

  • Dec 13, 2022

It will be years before policymakers know the long-term effects of the COVID experiment with Modern Monetary Theory. However, the episode has helped answer, once and for all, a question that’s troubled psychologists forever: Money can buy happiness! But it can’t buy hope.

Aug 05 2022

Confidence Cracking?

  • Aug 5, 2022

The theory of “contrary opinion” is important to market analysis, but so is an understanding of its limitations. When investor-sentiment surveys dipped sharply in late January, we warned that the declines (which are usually signals to “buy”) might instead mark the beginning of an important trend change. 

Aug 05 2022

Job Market Suddenly “Laboring”

  • Aug 5, 2022

We cringe when we hear the Treasury Secretary or a regional Fed bank president dismiss the possibility of recession on the basis of “low unemployment and strong job gains.” Those measures are as “laggy” as any economic statistics the government publishes.

Jul 08 2022

Sentimental Musings

  • Jul 8, 2022

Most sentiment measures show none of the frothiness that lingered in the months after the Y2K Tech bust. Rather, some exhibit actions reminiscent of early 2008.

Mar 17 2022

Special Study: Should You Buy The Dip? Some Statistical Considerations…

  • Mar 17, 2022

The correction in the S&P 500 since its high on January 3rd qualifies as a “severe” correction, which we define as a decline of at least -12% based on daily closing prices. What are the odds that it becomes a “major” decline*—in which the loss exceeds -19%?

In Section I, we review the history of severe corrections since 1950. In Section II, those corrections are analyzed in the context of the economic cycle, consumer sentiment, and other underlying factors—ones that might help us determine if today’s stock-market weakness is “buyable.” 

Feb 05 2022

Too Early For Curve Watching?

  • Feb 5, 2022

Last month, we published a table showing where we thought a variety of economic and financial-market measures lay along the economic recovery “continuum.” Although the upturn has officially entered just its 22nd month, the bulk of those measures looked “late cycle” in nature.

Oct 07 2021

Why Is Confidence “Inverted?”

  • Oct 7, 2021

In a recent “Chart of the Week,” we discussed the late-cycle “inversion” in Consumer Confidence, where consumers’ views of their “Present Situation” have jumped far above their “Expectations.” That’s the reverse of what’s typical in the first couple years of an economic expansion.

Sep 10 2021

Why Is Confidence “Inverted?”

  • Sep 10, 2021

Stimulus and soaring stock prices have contributed to the fastest consumer-confidence rebound of any economic recovery on record. Yet the manner in which this bounce has unfolded is anything but “early cycle.”

Feb 05 2021

How It Bodes For Biden

  • Feb 5, 2021

Early evidence suggests the Biden administration and the newly “purple” Senate will resist the pull of the far-left, at least from an economic perspective. Stock investors are cheering... though in light of their current euphoria, they might as well have celebrated a write-in victory for Ralph Nader alongside Green Party control of the Senate.

Feb 05 2021

Climbing The Wall Of Confidence?

  • Feb 5, 2021

Stock market valuations may be considered the ultimate in fundamental measures, but they can just as easily be considered long-wave sentiment indicators. What causes equity investors to pay as little as 10x for S&P 500 Normalized Earnings at one point (March 2009), but pay more than 30x a dozen years later? The Fed printing press was in overdrive at both points; only emotions can account for the difference.

Jan 29 2021

An Historical Look At Biden’s “Future”

  • Jan 29, 2021

We’ve read far too much about what Joe Biden and a newly-blue Congress might do in the months ahead, but less so about the conditions Biden and his team inherit. Such “initial conditions” usually have a heavy hand in policy outcomes, market outcomes, and even a president’s legacy.


May 07 2020

Is “NASDAQ Fever” Peaking?

  • May 7, 2020

Even casual market observers have begun to marvel at the NASDAQ’s ability to defy the rest of the stock market, and the “U.S. Exceptionalism Index” continues to go parabolic.

Apr 07 2020

A Bear Market In Price, But Not Time

  • Apr 7, 2020

We have a hard time accepting that the excesses associated with an eleven-year bull market and expansion can be fully expunged in 27 trading days, no matter how ugly those days were… keep some powder dry!

Apr 07 2020

Confidence Is The Key

  • Apr 7, 2020

The bull case for a “brief” pandemic-related recession and powerful recovery is the same as the bull case from two months ago for “no recession or bear market” at all: stimulus (as if that’s exactly what the U.S. economy has lacked for the last 11 years).

Apr 03 2020

Sentiment Has Been Crushed, But Might Need To Just Languish For A While

  • Apr 3, 2020

We didn’t see the coronavirus coming and, like millions or perhaps billions of others, underestimated its likely economic impact when it began to spread. But stock market risks were high well before the virus hit.

Mar 06 2020

Back Breaker?

  • Mar 6, 2020

With the wavering state of consumer and business confidence, even a modest stock market correction of 8-10% might deliver the fatal blow to confidence—and therefore to the U.S. economic expansion.

Oct 05 2019

More Trends We Don’t Find Friendly…

  • Oct 5, 2019

The yield curve’s ten-month moving average inverted in September, hence the yield curve inversion can no longer be dismissed as transitory; the Boom/Bust Indicator remains below its descending 10-month moving average, confirming economic weakness predicted by the yield curve; and, the “Present Situation” component of September’s Consumer Confidence survey slipped below its 10-month moving average for the third time in 2019.

Aug 07 2019

Altitudes And Attitudes

  • Aug 7, 2019

Trend followers who use the ten-month moving average discipline finally had a positive month in July. But after the early-August decline, they are still holding an S&P 500 loss of 60 points from their latest trade initiated at the end of June.

Jul 04 2019

Slowdown Or Recession? Confidence Is Key

  • Jul 4, 2019

The pattern of sharp sell-offs followed by equally sharp rallies continued in June. Most risky assets recouped nearly all the losses suffered in May, and then some.

May 07 2019

It’s A Confidence Game

  • May 7, 2019

U.S. stock funds have seen heavy outflows despite the market’s YTD gains of 15-20%, once again reviving the tired characterization of this bull market as the “most hated in history.”

Apr 05 2019

A Confidence Game

  • Apr 5, 2019

Several consumer confidence gauges plunged in the wake of the Q4 market decline (as expected), and then rebounded in a lagged response to the stock market recovery (again, as expected). But March saw the largest one-month drop in consumers’ assessment of their “Present Situation” since 2008.

Mar 29 2019

The Cycle Is Over If Confidence Fades Further

  • Mar 29, 2019

The “Expectations” component of the Consumer Confidence survey has been wobbly in the last few months, but the latest report, released on Tuesday, showed the first meaningful hit to consumers’ “Present Situation” since the stock market first began to struggle 14 months ago (Chart 1).

Jan 08 2019

You Call That A Panic?

  • Jan 8, 2019

Christmas Eve came not with snowfall but a market freefall which was the worst-ever recorded for that date.

Jan 07 2017

Tilt Toward Beta

  • Jan 7, 2017

Stock market valuations certainly show no lack of investor confidence: each of our “Big Six” valuation measures now resides in either its ninth or tenth historical decile.

Jan 07 2017

Plenty Of Love For The Rally

  • Jan 7, 2017

The less-well-known Stock Market Confidence survey from the Conference Board has poked into “excessively optimistic” territory for the first time since 2003

Jan 07 2017

Safety In Numbers?

  • Jan 7, 2017

The S&P 500 closed the first week of January at a new cycle high, up 9.2% from the pre-election low made on November 4th.

Jan 07 2017

“Changes In Attitudes, Changes In Latitudes”

  • Jan 7, 2017

The above caption—and Jimmy Buffett song title—comes from the “View From The North Country” section in the first-ever Green Book published in November 1981. Not much has changed in 35 years.

Nov 05 2016

Lack Of Confidence Has Been Greatly Exaggerated

  • Nov 5, 2016

While this 7 1/2-year bull market has failed to give rise to anything resembling the equity culture of the late 1990s, we think it’s a stretch to claim—as dozens of commentators over the past five years have—that this bull is “the most hated” in history.

Apr 08 2015

Confidence & Stock Prices

  • Apr 8, 2015

Consumer Confidence shot to new cycle highs in March, closing within 6-7 points of the peak made shortly before the Great Recession.

Jul 08 2014

Confidence & Stock Prices

  • Jul 8, 2014

We’re still bullish, but nonetheless feel a duty to take issue with some of the popular story-lines that have attended the past two years’ rising prices.

Jun 07 2013

Stocks And The Economy

  • Jun 7, 2013

We’ve written before about retail investors’ tendency to “conflate” stock market action with movements in the underlying economy. Misunderstanding this interrelationship generally causes the public to liquidate stocks when the economy is weak, only to ultimately buy them back when the economic recovery is obvious to all.

Dec 06 2011

Risk Aversion Edged Up - Stay Defensive And Be Patient

  • Dec 6, 2011

The Risk Aversion Index edged up during November. It is still on a “higher risk” signal. We will stay defensive and be patient. Higher quality assets within the fixed income space are favored.


May 06 2008

Morose On Main Street… So Why Isn’t The Smart Money Worried?

  • May 6, 2008

Consumer confidence levels have sunk to five year lows. Could this be a bullish omen for the markets?


Mar 05 2008

Jobs/Consumer Data Flashing Recessionary Signals

  • Mar 5, 2008

Optimists have continuously cited low unemployment and the ever resilient U.S. consumer as two “pillars of strength” that will help keep the economy afloat. It has become considerably more difficult to make this case in recent months, as jobs and spending data have weakened to levels associated with recessions.


Oct 03 2007

Consumer Watch– Economic Data Weakening, Consumer Stocks Already Discounting A Slowdown

  • Oct 3, 2007

Our view that the consumer is due for a pullback has been bolstered in recent months, as Consumer Discretionary groups have continued to slip in our Group Selection (GS) Score rankings.

Sep 05 2006

The Demise Of The Consumer

  • Sep 5, 2006

“Of Special Interest” section examines the likely demise of consumer spending power. Taking a lead from the GS Scores and other economic data, we believe that a significant underweight in areas that are particularly sensitive to consumer spending is a prudent strategy for now.

Aug 03 2005

The Consumer: Still Chugging Along

  • Aug 3, 2005

Consumer spending may have finally peaked in this cycle, but a consumer collapse is far from imminent. Consumers can be expected to remain supportive of economic growth.