Consumer Sentiment Beats Expectations, But Stock Rally Fades
Indexes were initially trading higher after University of Michigan consumer sentiment rose to 96.1 in June to its highest level since January, topping the consensus forecast of 94.6.
The results were 16.5 percent above the reading from last June and marked the biggest increase since 2004. The expectations component was especially strong at 97.8, a 12-year high, reflecting strong optimism for the jobs market. The current conditions index also notched a strong showing to 108.9 versus 106.8 for the preliminary reading.
In the release, University of Michigan chief economist Richard Curtin stated: "Consumers voiced in the first half of 2015 the largest and most sustained increase in economic optimism since 2004." Mr. Curtin goes on to say the readings are consistent with a 3 percent increase in consumer spending this year, the fastest pace since 2006.
Inflationary expectations remained muted, with a one-year outlook of 2.7 percent and five-year outlook of 2.6 percent, both slightly less than the preliminary estimates.
Markets initially rallied following the report, but now have fallen and are near the lows of the day. The S&P 500 futures are currently down 4.00 at 2090.00.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.