Markets Seeking Movement, Time Will Tell Which Direction
As you can see from all three charts, the markets are about to breakout OR break down, and odds are high that it will be a breakout to the upside, but only time will tell. If the markets breakout, which we expect they will, we should see a nice new high in short order. Look at how all three are setting up; interesting how close in chart pattern they are to each other.
Consumer confidence surges: The Conference Board’s Consumer Confidence Index jumped 12.7 points in April to 121.7, above the consensus of 112.5. The index hovered near its pandemic low for most of last year, but is now at its highest level since February 2020, and is consistent with above-trend economic growth. Just in March and April the index surged 31.3 points, the biggest two-month gain since April 1974. Confidence was boosted by the American Rescue Plan in March and increased vaccinations that have allowed for more business growth and job creation.
The present situation index shot up a record 29.5 points to 139.6, its highest level since March 2020. There were notable improvements in consumers’ assessment of both current business conditions and job availability. Consumer expectations edged up a much smaller 1.5 points to 109.8, but that was the highest level since July 2019. The outlook for business conditions was the strongest since July 1983. The outlook for jobs edged down marginally from the previous month, but was still historically elevated. Consumers were also more optimistic about their prospects for income growth.
Richmond Fed regional activity continues to expand The Richmond Fed Manufacturing Activity Index was unchanged at 17 in April, below the consensus of 22.5, but indicating continued robust growth of factory activity in the region. Shipments and employment expanded at slightly slower rates than in the previous month, while new orders growth accelerated. Backlogs and delivery lead times were at historic highs, reflecting continued shortages. Inventories of both finished goods and raw materials shrank, reaching record low levels. But manufacturers were optimistic that factory conditions will continue to improve in the coming months.