| Consumer Confidence : The market can be quite confounding at times. For weeks now, we have seen the market rally in the face of bad news as it has maintained a focus on the prospects for an economic recovery next year. This morning, though, the market has been unnerved by the Conference Board's Consumer Confidence Index for the month of November. Specifically, it has been rattled by the 82.2 reading that was down from 85.3 in October and below the consensus estimate of 86.5. Aside from that headline number, it didn't sit well with the market either that the Present Situation component inside the report plunged 13.7 points to 93.5. On the bright side, the Expectations component increased from 70.7 to 74.6. Given the market's inclination of late to look past data that reflect the current, and well-known, economic difficulties, you'd swear the market would have chosen to pre-occupy itself with the latter number. Ultimately, it may do just that, yet Briefing.com is concerned the rise in expectations may be tied less to improved conditions than an increase in those expecting little change. In other words, consumers are finding hope in the idea that current conditions won't get any worse. The problem, of course, is that things aren't so great right now, and the thought that current conditions could persist for a while isn't the most appeasing thought in light of the recent equity rally which has been predicated on the idea that the U.S. economy should be showing meaningful signs of recovery by no later than the middle of next year. Today's report does offer some hope that consumer attitudes are suggesting better times lie ahead, but for now, it seems a bit presumptuous to think a meaningful economic recovery is imminent. With that in mind, the market is perhaps thinking-- using its initial response as a guide-- that it has gotten ahead of itself in discounting the timing, and magnitude, of that eventual economic rebound.-- Patrick J. O'Hare, Briefing.com |
