Market Considerations and Analytics
Key Notes
- Consumer Sentiment Index: 58.1 up from 56.8 (Nov)
- Economic Conditions Index: 60.2 up from 58.8 (Nov)
- Consumer Expectations Index: 58.4 versus 55.6 (Nov)
In all three categories, consumer mood significantly improved over last month. The significant 14% increase in business environment over a year is one of the most noteworthy data findings. A further decrease in year-ahead inflation predictions, from 4.9% to 4.6%, was the lowest rate in the previous 15 months. The long-term inflation expectations stayed at 3% despite the euphoria surrounding the year-ahead gauge of inflation, perhaps reflecting the belief that inflation will remain persistent for a considerable amount of time.
The US PPI data showed a stronger reading shortly after the Michigan sentiment report was released, and this coincided with the currency strengthening as additional evidence emerged that the Fed still has work to do. Another relatively brief increase in the value of the dollar was caused by the optimistic mood statistics.
Following the release of the PPI data, the S&P 500 E-Mini Futures fell roughly 1.5%, and market sentiment now seems to be staying just below 61.8% Fibonacci retracement of the significant 2022 advance.
