Afternoon Note
The market popped, but then immediately began losing altitude, which is what we were expecting. But I have to admit, even with the evidence that consumers are becoming more skittish, I was surprised at just how much anxiety has built up.
The results missed the market by a mile.
University of Michigan Consumer Sentiment |
Actual |
Consensus |
Prior |
Sentiment |
57.7 |
63.0 |
63.5 |
Current Conditions |
64.5 |
67.5 |
68.2 |
Expectations |
53.4 |
60.8 |
60.5 |
1 Yr. Inflation |
4.5% |
4.4% |
4.6% |
5-10 yrs. Inflation |
3.2% |
2.9% |
3.0% |
The worrisome aspect of this is the year ahead outlook. Ouch. People have lost so much faith that even with seeing the economy “plummet,” they see inflation edging higher.
There was a time a year ago when a big jump in inflation expectations from this report got Jay Powell to move ahead with the most aggressive rate-hiking cycle ever. That’s just one of the reasons the market is recoiling on the news.
Interestingly, this is a reason the Fed would be ready to pause.
It might be surprising that Consumer Discretionary is the hardest hit sector in the market today.
Have a great weekend.
Tweet |
7/18/2025 1:14 PM | Consumer Tariff Worries Subside |
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7/14/2025 1:32 PM | Decisive Week |
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7/1/2025 1:29 PM | Rotation |
7/1/2025 9:45 AM | FEAR OF MISSING OUT IS CREEPING IN |
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