CB Consumer Confidence Misses Expectations, S&P 500 Remains Under Pressure

Key Insights

• CB Consumer Confidence declined from 107.1 in January to 102.9 in February. 
• Chicago PMI decreased from 44.3 in January to 43.6 in February. 
• Both reports missed expectations, highlighting recession risks. 

Chicago PMI Declines For The Second Month In A Row

On February 28, traders had a chance to take a look at the Chicago PMI report for February. The report indicated that Chicago PMI declined from 44.3 in January to 43.6 in February, compared to analyst consensus of 45. Chicago PMI is declining for the second month in a row.

Traders also had a chance to take a look at the CB Consumer Confidence report for February. The report indicated that CB Consumer Confidence decreased from 106 in January to 102.9 in February, compared to analyst consensus of 108.5.

Both reports missed analyst expectations, highlighting the growing pressure from higher interest rates. However, the market consensus is unlikely to change in the near term. Currently, traders expect that the Fed will raise the federal funds rate to 525 bps – 550 bps. It should be noted that some analysts have argued that Fed will have to push rates to the 600 bps level to fight inflation.

S&P 500 Retreats As Consumer Confidence Declines

S&P 500 is moving lower after the release of CB Consumer Confidence data. Consumer activity is ultra-important for the health of the U.S. economy. If consumer activity slows down, companies’ profits will decline, which will be bearish for all major indices.

U.S. Dollar Index is currently trying to settle below the 104.50 level. Treasury yields pulled back from session highs, which was bearish for the American currency.

Gold continues its attempts to settle above the $1820 level. The weaker-than-expected reports may serve as positive catalysts for gold as demand for safe-haven assets may start to grow.

For a look at all of today’s economic events, check out our economic calendar.