When Does Consumer Confidence Outstrip the Market’s Ability to Deliver Return?

Does consumer confidence pull the stock market to higher levels or does the market make consumers more confident?
Probably a bit of both, but at what point do consumers/investors become over-exuberant.

Does consumer confidence pull the stock market to higher levels or, does the market make consumers more confident?

Probably a bit of both, but at what point do consumers/investors become over-exuberant.

Since the beginning of the year consumer confidence has been growing faster than the stock market at a rate that is faster than anytime since 2008. Consumer confidence is important to the stock market, but at what level does hope outstrip the stock markets ability to deliver results? Does disappointment trigger a correction?

While the relationship is not a perfect correlation, there is a relationship between market slowdowns when expectations exceed actual results by a large margin. Potentially, this could occur before the end of the year. It does not mean a major correction, but it might mean we should moderate our expectations for 2018 / early 2019.

After all, it has been an above average year if we went on Holiday right now.

 

Posted by Steven Albrecht