Consumer Sentiment Rises To Multi-Month Highs

Key Insights

• U.S reported that Consumer Sentiment increased from 59.7 in December to 64.6 in January. 
• The report showed that Consumer Sentiment is improving despite recession worries. 
• S&P 500 continued to rebound after the release of the report. 

Consumer Sentiment Exceeds Expectations

On January 13, U.S. released preliminary Michigan Consumer Sentiment report for this month. The report indicated that Consumer Sentiment improved from 59.7 in December to 64.6 in January, compared to analyst consensus of 60.5.

The report showed that consumer mood was improving. At current levels, Consumer Sentiment is close to the levels of April 2022, when Consumer Sentiment settled at 65.2. The bottom was reached at 50 in June. Back then, consumers were extremely worried about rising inflation and high prices at the pump.

The strong consumer is an additional argument for the Fed to push rates towards the 5.00% level. At the same time, the news may be interpreted as bullish for riskier assets as they show that the U.S. economy remains in a decent shape despite recession fears.

S&P 500 Rebounds From Session Lows

S&P 500 continued to rebound from session lows after the release of the Consumer Sentiment report. Stocks found themselves under pressure at the start of today’s trading session after warnings from big banks, which started to build reserves ahead of the potential recession. The Consumer Sentiment report provided material support to the stock market.

The U.S dollar is mostly flat against a broad basket of currencies. Currently, traders do not believe that the Fed would be too hawkish. Treasury yields settled close to multi-month lows.

Gold is testing new highs near the $1915 level. The recent weakness of the U.S. dollar continues to provide significant support to gold markets.

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