Consumer Confidence Craters

From Bloomberg this morning:

April 11 — Confidence among U.S. consumers sank to a 26-year low in April as the labor market continued to deteriorate and gasoline prices rose.

The Reuters/University of Michigan preliminary index of consumer sentiment decreased to 63.2 from 69.5 in March. The reading was below the lowest forecast in a Bloomberg News survey and the weakest since March 1982.

Not a good day today, what with GE’s earnings miss. I wonder why the market was so surprised by GE’s numbers. After all, most of GE’s profits now come from various financing businesses. Finance of any kind is not a good business to be in right about now.

Interesting, by the way, that the previous low for consumer confidence was hit in 1982, toward the END of the last great inflation in the U.S. Could this be a good contrary indicator that the market is headed back up? Plenty of “experts” argue that the bad news is “priced in.” Just watch CNBC any morning.

Personally, I don’t think so. There are plenty more shoes to drop as the credit crunch/consumer pullback is only in its early stages here. Also house prices have farther to fall and corporate earnings estimates are still too high for the second half of this year.

Still too early to buy this market. Though I love reading the new low lists every day in the Journal. There are plenty of decent stocks that are washed out. Here’s hoping Moody’s gets back to $20…

Posted in Economy |