Consumer sentiment data points to a tug off war between fundamental worries and a robust job market – what is the eventual effect on the stock market?
John Mendolsa
Jul. 13, 2007

The consumer sentiment data shows an interesting trend. The consumers are fundamentally pessimistic but they are hoping that somehow the job market will stay robust, keeping the economy from plunging into a recession.

The stagnating economy, the rising inflation from commodities, and emerging market wage inflation is making the consumer worry. The car sales are suffering the most. The home pending resale rate shows the problems in the real estate market.

The effect on the stock market is negative. But stock market is in the middle of a bubble. The market is rallying for any reason it can find. Some people now believe market trading is the only way to make a living. They work full time but their mind, heart and soul throughout the day and in the evening is on the market and ways to make a quick profit. Most of these short-term rookie traders lose all the time, but they hope they will make it big next tine – the typical gambler instincts play.

The low-end job market is robust adding to some inflation. Consumer sentiment data points to a tug off war between fundamental worries and robust job market.

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