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...

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.