Consumer UNconfidence Numbers Disappoint

University of Michigan’s Consumer Confidence survey came in disappointing Friday. At 9:55am the report was released and expectations were for a move up toward 71. Instead it came in at 66. Both the Conference Board’s survey as well as this one are confirming that the high unemployment is taking its toll on consumers. The worst was the present condition that showed that there was little that was uplifting people into the holiday season.

The market first took the news badly and quickly shed 1% for the Russell 2000 small-caps and .75% for the S&P 500. Then, about 15 minutes later started driving higher. Much higher in fact. Why? Well, it would seem that there has been whispers and murmurs that a second stimulus (really the 5th at this point – but who is counting) is in the works.

Goldman Sachs (GS) (the Government’s official messenger Service) has been heard to be mentioning that an announcement could come soon. We also hear that Goldman will put it in its weekly notes due out this weekend.

Undoubtedly, any stimulus discussion will start with a statement that the unused TARP money will be the only place that they will obtain the money from, thus not increasing the deficit by one cent. Of course that will require Congressional approval, but it is almost time for the mid-term elections…right?

(click to enlarge chart)

Disclosure: Horowitz & Company clients may hold positions of securities mentioned as of the date published.

Comments

[Moon Kil Woong:]

Anyone voting for tapping TARP except to insure the solvency of the FDIC should lose their seat in office. The same goes with approving a second stimulus. The first one was a bad enough fiasco and wasn't actually the first stimulus (Bush Jr. did a tax cut stimulus that also largely failed).

Nov 15 11:18 AM

[Old Trader:]

I'm guessing that the big "bump" in the middle of the chart (from Nov. 08) was sparked by a) relief that the end of the world did NOT come about, and b) the fact the market started to ride, easing some of the pain of savaged retirement monies. Then "reality" set in, as people noticed things hadn't really changed all that much.

Nov 15 12:34 PM

[chris coonan:]

Retailers may get a lump of coal for Christmas...which will drive other indicators negative in January.

Nov 17 04:14 AM