Thursday, May 06, 2010

Rasmussen: Consumer and Investor Confidence Reach Highest Levels in April Since February 2008

From Rasmussen:

"The Rasmussen Consumer Index, which measures the economic confidence of consumers on a daily basis, jumped six points on Thursday to its highest level since Feb. 5, 2008. At 91.1, the Consumer Index is up eight points over the past week, up nine points from a month ago, and up 17 points from a year ago.

The Rasmussen Investor Index, which measures the economic confidence of investors on a daily basis, climbed five points today to its highest level in more than two years (since Feb. 6, 2008). At 105.4, the Investor Index is up seven points from a week ago, up eight points from a month ago, and up 25 points from a year ago. Among investors, 45% say U.S. economic conditions in the country are getting better, while 31% say they're getting worse. These findings show a dramatic shift from last year when 34% said economic conditions were getting better and 42% said they were getting worse."

Update: DJIA down by 350 points today.


At 5/06/2010 1:54 PM, Blogger Benjamin Cole said...

As Robert Shiller points out, "animal spirits" are important. That is something monetarists never grasp.

These surveys are more important than realized. After all, we still have our enormous physical and intellectual assets--roads, factories, farms (even if subsidized), high literacy rates, etc. Many R&D shops.

This phantasm called "credit" and a house of cards financial system undermined all the real economic power we have. It is like watching Samson laid low by a haircut--in his head only.

Go out and spend and start businesses. Also, read up on Plutonomy, a term invented by CitiGroup.

At 5/06/2010 1:55 PM, Anonymous Anonymous said...

The soon to arrive $5 a gallon gas prices will fix that.

At 5/06/2010 1:58 PM, Anonymous Called Shake Itoldya said...

Dow just fell off the freaking cliff. It's climbing back up on false hopes of an overreaction.

China just raised their required reserve ratio to 17% to pop their housing zit. Greece is on the verge of civil war. The EU is going to collapse. Foreclosures are rising again. Hundreds of banks will fail.

Financial armageddon is right around the corner and you've been calling a V, oblivious to the OBVIOUS signs of weakness.

Hope is not a strategy. Faith is not a plan. Optimism is not a substitute for analysis.

"Zero chance of a double dip."

Set the table and prepare to eat those words.

At 5/06/2010 2:20 PM, Blogger juandos said...

Does a spike in the price of gold signify some sort of new found confidence?

At 5/06/2010 2:41 PM, Blogger Value Added said...

I'm an admirer, Dr. Perry, but this was an unfortunate day for this post...

At 5/06/2010 2:45 PM, Blogger Benjamin Cole said...

Ugly, ugly, ugly. This will shoot investor confidence down.
Somehow we must construct a rock-solid financial system. One that does not collapse when investor sentiments waver.

At 5/06/2010 4:20 PM, Anonymous Called Shake Itoldya said...

Do you see him now trumpeting the rebound to ONLY a 350 point loss as some sort of positive sign?

The tremendous turbulence in the market today is the story, not the final score. The buy-up was from people thinking they were getting a bargain. It's a classic dead cat bounce.

If a riot in Greece, falling oil prices, and a weak retail report can induce a 1000 pt drop, what will tomorrow's news bring? Anything good?

Treasuries soared. It's a classic flight to quality. Watch for another sell off tomorrow of at least 250. People are going to sit at home tonight and decide they don't want to be on tomorrow's roller coaster. They won't want to risk half their remaining portfolios in this environment.

Only two things can explain today - panic and coordinated trading rules. The fear is not unjustified. Optimism is not well grounded.

I'm staying out of the market until year end and then get out of treasuries when interest rates start to rise. It had to happen: eventually the gold gurus would be right.

At 5/06/2010 4:40 PM, Blogger Value Added said...

Bitter much, Itoldya?

Perry didn't write "ONLY" - in fact, ONLY you did.

At 5/06/2010 5:26 PM, Blogger Methinks said...

What? No post on how awesome things are with the VIX, professor?

Sorry for the sarcasm, but I was sure you'd say something about that spike and give me the opportunity to repost one of Morganovich's excellent tutorials about the VIX.

At 5/06/2010 6:17 PM, Anonymous Titus Pullo said...

Wasn't the economy already in recession in February 2008?

At 5/06/2010 6:19 PM, Blogger PeakTrader said...

Well, the stock market is not the economy. The stock market has been rising, most likely, because of high productivity and low wage growth, which raise profits.

Also, no one wanted to completely miss this huge rally. So, more investors had to jump on the bandwagon.

There were too many investors who wanted to make money, but didn't believe in the rally. So, of course, there was a stampede.

At 5/06/2010 6:44 PM, Blogger PeakTrader said...

Greek riots make the Tea Party movement look like a tea party:

"Groups of masked youths hurled petrol bombs, stones and sticks at riot police as nearly 50,000 striking workers and public servants marched to parliament...marchers chanted "Thieves!" and hurled water bottles at riot of deaths rattled investors, with Greek stocks falling by almost 4 percent and the euro losing ground to the U.S. dollar."

At 5/06/2010 7:42 PM, Anonymous gettingrational said...

I am not suggesting professional jealousy, of the tremendous CARPE DIEM, but why was the stock of Apple and Proctor & Gambel possibly manipulated after this posting today?

At 5/06/2010 9:37 PM, Blogger bobble said...

PT:"The stock market has been rising, most likely, because of high productivity and low wage growth, which raise profits."

that's one good explanation.

another would be zero interest rates driving unprecedented liquidity into an asset bubble.

At 5/06/2010 11:01 PM, Anonymous Itoldya said...

@Value Added

Tell me: what relevance was the "Update" that the DOW fell 350 points to the original post?

What it merely value-added information?

No. Actions have motives and the clear motive was to soft-pedal the massive plunge in investor confidence that was going on at precisely the moment the professor was dancing a jig about rising investor confidence.

That's why I inserted "only" - because that is what was intended by the statement.

The DJIA was down 216 points from the opening bell to the moment BEFORE the plunge, so finishing 350 down was a punctuation mark on a really bad day. The S&P 500 fell by a larger percentage than the DJIA, so it wasn't just volume trading of a couple of prime movers in the DOW that contributed to this decline. 90% of issues on the NYSE declined today and 63% of the volume was down.

Some of us are able to read between the lines of apparently innocuous comments.

At 5/07/2010 3:01 AM, Blogger KO said...

Here's something to consider when looking at the high Investor Confidence.

"The lowest level ever measured was 52.5 on March 9, 2009."

That was the bottom of the market.

At 5/07/2010 8:04 AM, Blogger juandos said...

Yeah, consumer confidence is good and so is the spin...

Consider the following AP spin: The unemployment rate rose from 9.7 percent in March to 9.9 percent in April, mainly because 805,000 jobseekers — perhaps feeling better about their prospects — resumed their searches for work...

Yeah, I'm imbued with all sorts of confidence now...

At 5/07/2010 8:20 AM, Anonymous morganovich said...

investor confidence surveys are contrary indicators. they are always at high levels at tops and low levels at bottoms - that's what causes tops and bottoms.


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