Consumer Sentiment and the Stock Market
About this episode
The episode discusses the relationship between consumer sentiment and stock market performance amidst average economic conditions.
Despite very average economic performance, consumer sentiment remains at extraordinarily low levels. While there are many interesting aspects to this phenomenon, one is of particular relevance to investors. As we show on page 32 of the Guide to the Markets, peaks and troughs in consumer sentiment have, for many years, been powerful contra-indicators of stock market performance over the subsequent 12 months. However, does this relationship still hold, if the reason for weak sentiment is beyond the realm of a rational assessment of broad economic conditions?
More episodes of Notes on the Week Ahead
- A Top Down View of the Earnings Surge
- The Fed Communications Debate: Bernanke Versus Warsh
- The Healing of Housing
- The MOU and Warsh: A Changing Macro Landscape
- The Inflation Outlook and Fed Policy under New Leadership
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