Consumer sentiment saw its largest decline since December 2012 to 89.8 down from 98.4 in July.  The University of Michigan used the term “tariff cliff,” which I haven’t heard one person in the financial or non-financial community use.  It will be picked up by those in the media eager to stoke such concerns.

I do agree with the assessment the level of sentiment is still consistent with modest gains in consumption, and in fact, we saw that this morning as consumer spending continues to soar in the face of volatility sentiment readings.  I also agree the way President Trump has announced his moves have added a level of uncertainty that takes away from the fact we are winning the trade war.

The news dovetailed with a report of overproduction of crude oil this month in Russia, which sent crude plunging taking the energy sector along for the ride.  Consumer Discretionary is down the most, but a big chunk of that is the carnage on Ulta Beauty (ULTA).

Summation

With so few investors around today, it’s easy to dismiss the session, but we are seeing the same kind of resolve that turned Wednesday from a losing day to a solid winner.  I think smart buyers and speculators have been nibbling on weakness all week mitigating normal reluctance to buy into so much uncertainty and before a three-day summer weekend.  Have a great holiday.