Discussing the History of Consumer Confidence and Its Stock Market Correlation
April 26, 2022
Welcome to Wealth Enhancement & Preservation’s Market Minute, where we get to update you on everything that happened in the financial markets this week. My name is Darrin Cohen, and I am the CEO of Wealth E&P.
Unfortunately, it was another poor week in the markets last week. All three major indices were down anywhere from 1.8% for the DOW to 3.8% for the Nasdaq. Let's take a look at and talk about Consumer Confidence, which you might expect to be pretty low right now given the conditions of the stock market, inflation, interest rates, and Ukraine.
You can see the dotted line in the middle of the chart shows consumer sentiment historical averages at about 85. Right now, we see it at a low of 59. However, when you look back 50 years, when the score is high, the S&P actually doesn't perform very well for the next 12 months. We can see movements of -6, +1, +13, and -2. Alternatively, when consumer sentiment is low, the S&P tends to do well for the next 12 months; we see movements such as +22, +19, and +29. So, history will hopefully prevail.
As we sit here at a low of 59, the S&P will hopefully do quite well for the next 12 months to match historical predictions. If you’d like to chat about whether now is the time to invest or not, whether it’s time to dollar-cost average into the markets, or anything else, give us a call at (678) 739-0175.
If you have any other questions, if you want a risk profile, or if you would like a retirement projection, please feel free to reach out or visit www.wealthep.com. Otherwise, stay tuned for our Market Minute next week!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
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