Out Fox The $treet

The Thomson Reuters/University of Michigan final index of sentiment climbed to 79.3, the ninth straight increase, from 76.4 the prior month. The gauge was projected to hold at the preliminary reading of 77.8. The ninth straight increase is a record. Interesting as it shows that Americans are finally moving past the European crisis. Cheaper gas and a better housing market is helping pull the American consumer forward while the downside risk in Europe is apparently wanning in the mind of consumers. Even more interesting was news that German consumer confidence is expected to hold steady and France confidence increased in May to the highest levels since Nov 2010. So does this mean the feared markets collapse in 2012 won't be a reality? Has the market got it wrong that a repeat of 2010 and 2011 is on the way? The market has a way of disappointing when everybody thinks one way. Three years in a row would be too much of a pattern. Details from Bloomberg : Estimates for the confid...

Even with the stock market booming and employment improving, consumer sentiment as reported by the University of Michigan remains very tepid. The March report came in at 74.3 this mornings which was slightly below the prior 75.3 level. It was also below the consensus levels of 76. Either way these numbers remain at the high end of the range for the last few years as the chart below shows. Still this is significantly below historical levels showing how pessimistic consumers remain. The main culprit is supposedly gas prices though most consumers are benefiting on the flip side from lower natural gas prices for utility expenses. The net impact to wallets is probably flat for consumers though the media focus is always on gas prices. Not to mention consumers don't readily see nat gas prices. Most likely pay their monthly electric bill without any notice of the fuel charge. Now the key is whether sentiment has hit the top end of the range or whether a breakout can finally occur. A...

Really? Consumers feel the economy is so bad now that it feels like April 2009 all over again? Back then, the US economy was at the end of a horrible recession labeled as the Great Recession. Our banking system just about collapsed and the housing sector was collapsing. Now the economy is growing at a slow pace, jobs are being added at over 100K per month, and home prices have mostly stabilized. Oh, and don't forget that the stock market has soared in those 2 years. For August, Consumer confidence plunged to 44.5 from 59.2 in July and expectations around 50. Why are consumers so gloomy? Sure the debt ceiling debate and the downgrade of US debt was depressing to watch but it didn't impact any jobs. Nor did it impact the future of the US with interest rates dropping after the downgrade. Maybe all this explains why retail sales continue to rise while sentiment plunges. Consumers might feel gloomy due to the news, but it appears to be sending them to the shopping mall to cure...

Haven't posted much lately in the 'Future Stat of the Week' column, but that's something I plan to post on more going forward. To determine the direction of the, it's crucial to foresee where the direction of economic data is headed and whether economists have accurately updated expectations. For this week, the key economic stats are the manufacturing data of the Chicago PMI and ISM Manufacturing. Secondary are the consumer confidence reports of the Consumer Confidence Inex and the final University of Michigan Sentiment Index. While all of these numbers are expected to be lower in Sept then Aug, the Manufacturing numbers are sill relatively strong supporting a higher market. The consumer confidence indexes are expected to be lower which could provide an opportunity for an upside surprise. The stock market has been historically strong this September making an assumption of a jump in these indexes as possible. Don't see how they could drop even lower. The jobl...

Fast Money is always an interesting show because it features 4 traders and its always good to know why traders are doing what there doing. When this show is as bearish as it was today during lunch, it makes Stone Fox Capital much more bullish. Especially when we are already bullish. So why were they so bearish today? Surely it was due to higher interest rates or negative earnings reports or a meaningful economic report. Nope. It was because of the weak Consumer Confidence report today. A report that is generally dismissed because of its lack of forecasting actual consumer spending trends. The report showed that consumers were more bearish today then anytime in the last 10 months. Really? When you review the facts, how is that possible? The economy is growing, the stock market has soared, and job losses are now negligible yet consumers are really much more bearish then when the world was still falling apart? It's really absurd that none of the traders or even the host pointed out t...

The University of Michigan September sentiment numbers roared ahead this month easily surpassing consensus and sharply above early August numbers. These numbers are always very volatile and not always in tune with actual consumer spending. The impressive part of this report was the future expectations continue to reach levels not seen until prior to the financial collapse. The Reuters/University of Michigan Surveys of Consumers said its final index of sentiment for September rose to 73.5 from 65.7 in August. This was above economists' median expectation for a reading of 70.3, according to a Reuters poll. The index of consumer expectations rose to 73.5, its highest in two years, from 65.0 in August. "Consumers reported that the economy had already begun to improve and anticipated further gains in the year ahead." The index of current conditions rose to 73.4 in late September from 66.6 in August.

After a few rough months, consumer confidence has finally rebounded sharply after peaking in May. With the general economic situation much improved over the last 3-4 months, the confidence of consumers has been of the main laggards in the Leading Economic Indicators. Indicators that were up 6% on a annualized basis would've been significantly higher had consumer confidence been up to match the economic reality. The August report showed a significant jump over July from 47.4 to 54.1 The main gains took place in the Expectations Index while the Present Situation Index saw a very slight improvement. Its not surprising to see expectations soar to highs not seen since the recession started in Dec 2007, but its still disappointing to see consumers so gloomy about the present situation. A reading below 25 is absurdly low. I'd look for continual improvements throughout the next year unless the media can convince us otherwise. The Conference Board Consumer Confidence Index ®, which ha...

The University of Michigan consumer sentiment survey came out with much worse then expected results today. Why in fact is the consumer sentiment down in August from July? And why are consumers have such lower personal expectations while being more bullish on the national economy? My guess is that the media spent most of July and now August obsessing about job losses, foreclosures, and such that its gotten the average consumer downbeat when they should be more positive. The economy clearly isn't peachy so it's not about whether its a great economy, but consumers should be much more bullish then they were in June and even July. Its so much clearer now that the economy has turned the corner and at this point all we lack is a stronger consumer in the US for an all out bullish scenario. About the only reason a double dip recession could happen is if the consumer were to remain hidden. Luckily though, consumer confidence surveys don't always align with spending. Consumers tend t...

Just as was reported on the 15th [ Stat of the Day: Consumer Confidence Soars ], the markets are again soaring because of good consumer news. This time its from the Conference Board which typically has more influence then the Michigan Survey on the 15th. Still the market should've expected a huge jump. The Index soared beyond estimates of 42.3 by a wide margin to nearly 55. What were those analysts thinking? As the Michigan Survey showed, future expectations are soaring. Expectations were at 72 while the Present Situation came in at 29. So basically the Consumer Confidence number is going to continue to soar. Michigan expectations were at levels not seen since October 2007 and while not noted in this report I'd expect them to come close to that time frame. Its definitely higher then the number a year ago. Retailers such as SHLD and TWB are soaring on this news while DKS is doing pretty good. Both SHLD and TWB are worth considerably more if the consumer returns. The Conference ...

According to the preliminary Michigan Surveys of Consumers, consumer expectations are at the highest level since Oct 2007. The consumer sentiment is at the highest levels since Sept 2008. That's pretty amazing considering the stock market was at 1,200 back in September and the housing and job markets have continued to plunge. Based on these numbers, I'd expect some more snap back in retail spending. For the first time in 20+ months, consumers actually see a brighter future. Now this doesn't always impact spending short term it ultimately will have an impact. Surprising that the market is down so far today with rather upbeat news on the consumer front. Normally I'd not pay attention to this report because it doesn't always translate to consumer spending but expectations have reached a reflection point. When psychology turns it doesn't turn back that easily. The Reuters/University of Michigan Surveys of Consumers said its preliminary index of confidence for May r...

The Conference Board reported today that Consumer Confidence soared in April to 39.2 from 26.9 in March. Some how expectations were only 29.5 which seems incredibly low considering the huge market rally and stabilization in the economy in general. Considering the index remains below the year ago levels of 62.8, consumers have a long way to go just to get to those depressed levels. Though this report typically has little value because it measures how consumers feel and not how they spend it is encouraging that the Expectations Index soared showing that consumers have become a lot more confident about the future. The New York-based Conference Board said Tuesday that its Consumer Confidence Index rose more than 12 points to 39.2, up from a revised 26.9 in March. The reading marks the highest level since November's 44.7 and well surpasses economists' expectations for 29.5. The huge jump in confidence follows a small increase in March, following a freefall in February. Still, th...

According to the Conference Board , it's consumer confidence index fell to its lowest level since they began tracking it in 1967. This isn't surprising considering the large drops in housing prices and stocks. It's definitely a sign that consumers are gloomy. Does it mean that consumers won't spend? Thats yet to be seen as this report usually doesn't match what consumers actually spend. Some random consumer answers a phone and responds that they are gloomy then they go out to the mall and buy some clothes. Thats basically how the reporting works. Falling gas prices are more likely to impact consumer spending then the stock market or a house. Gas more directly impacts the monthly budget of most consumers, while big ticket items are the ones most likely impacted by housing and stock declines. So expect a weak holiday, but don't bet the house that this report accurately reflects spending. The Conference Board said the consumer confidence index fell to 38, down from...