1. Consumer confidence index fell to 86, lowest since May 2020. 2. Expectations Index dropped to 54.4, signaling potential recession. 3. 72% of consumers foresee a U.S. recession in the next year. 4. 12-month inflation expectations rose to 7%, highest since November 2022. 5. GDP growth forecast at only 0.3% for Q1, weakest since Q2 2022.
Falling consumer confidence and high inflation expectations may hinder spending and economic growth, historically linked to market downturns, such as during the 2008 recession.
High likelihood that reduced consumer confidence and rising inflation expectations directly affect S&P 500 companies' earnings and stock performance.
The immediate economic outlook suggests declining consumer sentiment will impact corporate earnings soon, akin to past downturns impacting S&P 500 performance quickly.