Jim, ECB dropped rates 1/4 point and the US markets are now testing the April lows. Perhaps a technical necessity. (You never did get back to me about the gap fill.)
Sergio:
Which gap are you referring to...
The dip in consumer confidence numbers could usher in the long anticipated capitulation phase of the Bear Market... That could actually be a good thing because market bottom uncertainty would be removed...
siliconinvestor.com
Aug 31 11:00am ET
By Ross Finley
NEW YORK (Reuters) - U.S. consumer sentiment dipped in August, led by worsening
expectations for the future as corporate layoffs piled higher and the stock market
weakened, market sources said a Friday report showed.
The University of Michigan's August consumer sentiment index, which is released
directly to subscribers only, dipped to 91.5 from 92.4 in July, sources said.
Economists had forecast the index to read 93.2. The preliminary reading, released
mid-month, was 93.5, the highest seen since January.
"These results suggest that despite Fed rate cuts, tax rebate checks, and lower
gasoline prices, consumer moods are eroding rather than improving," said Stephen
Stanley, senior economist at Greenwich Capital Markets.
"While the August deterioration in attitudes was not drastic, it is certainly troubling and
will make upcoming spending and confidence readings critical in judging whether the
economy will do better in the second half of the year."
The current conditions index, a gauge of how comfortable American consumers feel
about present economic conditions, rose to 101.2 in August from 98.6 in July. That
number was down slightly from a preliminary figure of 101.7.
The expectations component, which measures consumers' attitudes about the year
ahead, fell sharply to 85.2 in August from 88.4 in July, bring it back to roughly where it
was in May. The preliminary reading was 88.3.
Financial markets focused on separate reports showing a slight improvement in factory
orders nationwide and manufacturing in the Chicago area as well as a speech by
Federal Reserve Chairman Alan Greenspan and mostly shrugged off the data. Treasury
bonds fell while stocks rose.
The University of Michigan's main index tracked the direction of the Conference
Board's barometer of consumer confidence, which also fell in August.
But the drop in that measure, released on Tuesday, was led by a more pessimistic
assessment of the present situation. That report rattled financial markets around the
globe on worries U.S. consumer spending, which accounts for two-thirds of overall
economic activity, could ebb in months ahead.
Analysts said the two surveys do not always move in tandem on a month to month
basis.
Drew Matus, economist at Lehman Brothers, said the drop in expectations "is
somewhat worrying" but should not cause too much alarm as the data contradicted
the Conference Board survey's findings, which samples roughly 5,000 households and
which are more driven by labor market conditions.
The Michigan data are compiled through telephone surveys with roughly 500
respondents each month.
Jim |
