Stocks are mixed this morning, which seems an appropriate response to the latest Consumer Sentiment report. Ninety minutes into the session, the S&P 500 is climbing back towards par but remains down 0.32%, while the Dow is flat, and the Nasdaq is 0.99% below Thursday’s close.
The 10-year yield continues to moderate from 4.00% earlier in the week to 3.79% today.
Meanwhile, the U.S. dollar is moving higher against the Yen and Euro, while oil has fallen about 1%.
The main release of the morning was at 10 am. Consumer Confidence continued to rise in June for the fourth consecutive month, though the gain was marginal and less than anticipated. The Reuters & University of Michigan survey advanced from 68.7 to 69.0 in June, pushing the index to its highest level since September.
The details of the report were somewhat odd. The component looking at economic conditions improved dramatically from 67.7 to 74.5, a 15-month high. However, a component looking at future conditions declined from 69.4 to 65.4.
The numbers suggest that Americans are happy about recent developments in the economy but may hold concerns about the direction of policy, the falling value of the dollar, and the deepening debt.
Economist Ian Pollick from TD Securities called the numbers worrisome.
“The U.S. consumer has been backed into the proverbial corner, and the psychology behind the traumatic events over the past two years suggests that the consumer is looking for a taste their tongue can no longer recognize,” he said. “With the pre-crunch norm hovering at an index level of around 90, the report continues to sit in historically low territory, and will likely be a long time until we see such levels touched again.”
The survey also found inflation expectations rise from 2.8% to 3.1%, which stands in contrast to reality ― a mixture of flat prices, deflation, and rising costs for oil.
Earlier in the day, for instance, the Labor Department said Import Prices rose 1.3% in May, the largest increase since July, but when fuel is excluded prices advanced just 0.2%.