Michigan Consumer Sentiment Rises To A Four-Month High

Key Insights

• Michigan Consumer Sentiment increased from 59.2 in May to 63.9 in June. 
• Index of Consumer Expectations grew from 55.4 to 61.3.
• SP500 settled near yearly highs. 

On June 16, the University of Michigan released the preliminary Michigan Consumer Sentiment report for June. The report indicated that Consumer Sentiment improved from 59.2 in May to 63.9 in June, compared to analyst consensus of 60.

The University of Michigan commented: “Consumer sentiment lifted 8% in June, reaching its highest level in four months, reflecting greater optimism as inflation eased and policymakers resolved the debt ceiling crisis.”

The report also noted that the majority of consumers still expect difficult times in the economy over the next year.

Yesterday’s Retail Sales report showed that Retail Sales increased by 0.3% month-over-month in May, exceeding analyst estimates. The rising Consumer Sentiment explains the better-than-expected Retail Sales data.

SP500 settled near yearly highs after the release of Consumer Sentiment data. Traders bet that U.S. will avoid a recession despite rate hikes. Interestingly, stock traders ignore rising Treasury yields, which continue to move higher as traders focus on the hawkish Fed.

U.S. Dollar Index is trying to rebound from recent lows as traders take some profits off the table after the strong pullback. The better-than-expected Consumer Sentiment report may provide additional support to the American currency.

Gold remains stuck near the $1960 level as traders focus on rising yields and the rebound of the U.S. dollar. The dynamics of Treasury yields remain the key problem for gold bulls.

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