The Strong Consumer Confidence Report Pushes S&P 500 To Session Highs

Key Insights

• CB Consumer Confidence increased from 100.2 in November to 108.3 in December. 
• It remains to be seen whether market participants will view the strong Consumer Confidence data as a sign of a more hawkish Fed.
• Existing Home Sales report highlighted the negative impact of higher interest rates on the housing market. 

CB Consumer Confidence Exceeds Expectations

On December 21, U.S. released CB Consumer Confidence report, which indicated that Consumer Confidence improved from 100.2 in November to 108.3 in December.

Analysts expected that Consumer Confidence would grow to 101, so the report exceeded expectations. The surprising increase of Consumer Confidence indicates that consumer mood improved despite the slowdown of the economy.

Traders also had a chance to take a look at the Existing Home Sales data for November. The report indicated that Existing Home Sales declined by 7.7% on a month-over-month basis, compared to analyst consensus of 5.4%.

High interest rates continue to put pressure on the housing market. In addition, it looks that potential homebuyers do not rush to buy homes as they are waiting for lower prices. While the housing market outlook remains challenging, market participants do not look worried about a potential crisis in this segment.

S&P 500 Gains More Ground After Consumer Confidence Data

While the Existing Home Sales data missed expectations, markets have mostly ignored the report as it highlighted a well-known trend. Market participants do not expect that the situation in the housing market will improve at a time when the Fed continues to raise rates.

Meanwhile, the surprising Consumer Confidence data provided additional support to S&P 500, which moved towards session highs near the 3860 level.

The U.S. Dollar Index showed little reaction to the Consumer Confidence data and remained close to the 104.15 level.

The price of gold continued its attempts to settle above the important resistance level at $1815.

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