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Will consumers’ gloomy outlook take the bloom off the stock market? - MarketWatch

1. Consumer confidence dropped significantly, but it may not impact stocks negatively. 2. The spread between CCI and UMI is historically concerning ahead of recessions. 3. Higher spread levels correlate with lower S&P 500 returns over 12 months. 4. Stock owners remain optimistic, while non-owners show greater concern for personal finances.

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FAQ

Why Bearish?

The widening gap between sentiment indices suggests economic friction, which could harm S&P 500 performance. Historically, such spreads have indicated lower future returns for the index.

How important is it?

The article highlights consumer sentiment's impact on economic trends that affect S&P 500 metrics.

Why Long Term?

The correlation between sentiment spread and long-term S&P 500 performance indicates sustained effects. A similar pattern has been observed before major recessions.

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