University of Michigan May sentiment final reads came in below expectations and below prior mid-month figures. The headline index moved from 48.2 to 44.8, reaching a new all-time low since the 1970s. The current conditions index fell to 45.8, also at an all-time low, while the expectations index dropped to 44.1, another record low. The April reading was already below the 60 recessionary threshold, and May pushed further downward. Inflation measures added pressure, with one-year inflation rising from 4.7 to 4.8 and five-to-ten-year inflation expectations increasing from 3.5 to 3.9. Geopolitical developments in the Middle East were cited as a factor hurting confidence.
"These are University of Michigan sentiment may final reads. They're adjusting the mid-month reads, and all of them are lower than expected and lower than our last look."
"Headline number moves from 48.2 to 44.8. That is another new all-time low going back to the 70s. Meanwhile, the S&P 500 closed Friday at $7,473.47, sitting on a 9% year-to-date gain and a 28% one-year advance. The Nasdaq-100 is up 17% YTD and 40% over the past year."
"On the inflation. Also not good news because it's going up the one-year inflation from 4.7 to 4.8. Five-to-ten-year inflation expectations climbed from 3.5 to 3.9. That one-year read is the highest since the early 1980s. Headline CPI corroborates the pressure: the index sits at 332.4 as of April, in the 90th percentile of its 12-month range."
"Many believe, including myself, that there is definitely something going on here about what's going on in the [Middle East]. It's not helping confidence, that's for sure."
#consumer-sentiment #inflation-expectations #macroeconomic-indicators #geopolitical-risk #stock-market-performance
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