The magnitude of that monthly change in the consumer confidence index (reported today) was severe, perhaps the most surprising negative monthly change for an “economic” report in quite awhile. Although the correlation between consumer confidence and consumer spending is often ambiguous, that report is still troubling since both the “present situation” and “expectations” components of the index declined sharply. I suppose that part of the large drop this month was because the survey was taken during the recent market correction, as sentiment is likely to dip during a correction. Nevertheless, that was quite a drop.
I’ve never believed in the “V.” Not sure about a “W”, but hard to believe that it won’t be an “L” or, at best, a “U.”
Now add in a couple weeks in a row of very bad unemployment claims, including an increase in continuing claims. Also, the new housing number yesterday was absolutely pathetic, even taking into account the weather in January. Continued home price depreciation, poor durable ex-transportion, etc. I thought that the SP500 was heading for at least 980-1020 before the recent correction. Another week or so of news this terrible and it may get there.
mulls, I left out that the number of banks on the FDIC watch list is now 700. If anyone thinks all of the bad real estate has bottomed out, they simply aren't looking at this potential supply. What was Carl Sagan famous for saying: "Billions and billions and billions."