US Consumer Confidence to reflect debt concerns

A stronger than expected income/spending report on U.S. consumers added to risk sentiment yesterday and again today we will have to wait until the U.S. session for the market-movers even if there are plenty of releases in the early European session as well.



U.S. Conference Board Consumer Confidence: The shock 55.7 reading in the Michigan Consumer Confidence report for August highlights the uncertainty facing U.S. consumers at the moment, but it is also probably a reflection of the uncertainty surrounding the U.S. debt debate (and downgrade) and hence should bounce back in September. Given the report from Michigan, it is not surprising that expectations for today's Conference Board Consumer Confidence are low with consensus looking for 52 in August after a 59.5 reading a month ago. However, no matter whether the reading is 59.5 or 52 it is deep in recessionary territory, in which the index averages 68.9. The average for expansions? 98.5!


CaseShiller Home Price Index: The housing market in the U.S. continues its anaemic performance with sales of both new and existing houses far, far lower than what was observed before the crash. Prices have entered a double dip as well, but in the last few months there have been signs of improvement with CaseShiller printing month-on-month changes of -0.05 and 0.44 percent in May and April, respectively. The FHFA House Price Index has also shown stronger numbers with positive MoM in every month of the second quarter. So while house prices (according to CaseShiller) will likely accelerate their decline in the next few months on a year-on-year basis, the bottom seems not too far away.