Not Much Confidence

This morning, the consumer confidence number was released with a reading of 37.7.  The estimates were at 39.  This was an index created in 1985 at a level of 100.  It’s gone back and forth through the years and as recently as the fall of 2007 was over 100.  Needless to say, it’s fallen off of a cliff.  I’ve brought this up before because I care about correlations.  I care about how these types of numbers relate to your stock prices.  Unfortunately, this number is very correlated with equity prices.  Granted, it is a lagging indicator.  It’s also a self-fulfilling prophecy to some degree.  If stock prices are falling, of course people will feel lousy.  So, I expect this number to keep falling even after the stock market eventually bottoms.  Hower, I’m still going to show below two confidence indexes compared with the S&P 500 so you can get a gauge on where we were and where we are right now. 

The S&P 500 is the orange line and the yellow and green lines are the two confidence indicators. 

Consumer Confidence With S&P 500

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