The giddiness Friday morning shouted around the world (well, ok, it was CNBC) as retail sales figures were announced (up .3%, the fourth increase in five months, although two previous months were revised downward), gave wings to the markets before the opening. This was proof positive that the V recovery was well underway.
Unfortunately, an unwelcomed, unappealing guest appeared at the party, namely consumer sentiment. The Reuters/University of Michigan preliminary index of consumer confidence fell to 72.5 from 73.6. This minor reversal from the month before damaged the meme of full speed ahead for the recovery via consumers and the market abruptly sold off moving into negative territory.
Appropriately, the invisible hand of the market (no, not the Plunge Protection Team) soon arrested the market’s fall and returned trading to its proper level.
The cha-cha-cha of positive and negative new continues. A robust V-Shaped recovery requires a healthy and uninhibited consumer too. Are we at the end of the beginning or at the beginning of the end of a significant period in the economy?
I know where one-half of these Charles Dickensian tales are told.