WSJ: Stock Market and Consumer Sentiment Diverge

Author:
Publish date:
WSJ - source, Getty

The gulf between monthly percentage change of the S&P 500 and the University of Michigan’s consumer sentiment survey grew to 32 percentage points last month — the widest gulf in history for the data that dates back to 1978, according to The Wall Street Journal.

Even as unemployment grows to record highs and consumer spending fell at its fastest rate since 1959, stocks continued to rise.

The S&P has grown 34 percent since March 23, cutting its losses for the year to 7.4 percent, the newspaper reported.

“The current situation is quite unique,” Richard Curtin, a research professor who is the chief economist of the University of Michigan’s sentiment surveys, told WSJ. “Consumers are very negative about the current economy. It’s about as bad as we’ve ever recorded.”

However, the survey showed that those who responded expect the economy to rebound quickly, as the source of the decline was primarily driven by the covid-19 pandemic; compared to previous recessions, the fall in the expectations index was much less severe.

Wall Street is betting on a quick recovery, while sentiment reflects employment numbers, said Lakshman Achuthan, co-founder of the Economic Cycle Research Institute.

In April, 20.5 million workers were laid off. The official unemployment rate is 14.7 percent, but experts estimate the number is closer to 25 percent.

But, it is possible that consumer sentiment is lagging a recovery. In 2009, the market bottomed in March, and the recession ended three months later.

“Technically, you have a recovery,” said Achuthan. “But it won’t feel like it.”

Related

Fairline Yachts Acquired

For the third time in five years, the esteemed U.K. builder has changed hands.

Free Fishing Fun with Cabela’s and Bass Pro Shops

To launch their Gone Fishing promotion, the outdoors companies are donating 40,000 rods and reels to youth-fishing partners and holding free in-store fishing events June 19-20.

Yamaha Rightwaters to Support Wetlands Conservation

The marine manufacturer’s national sustainability program will sponsor the Ducks Unlimited Gulf Coast Initiative.

Boatsetter Enters Global Luxury Yacht Market

With its Boatsetter Lux service, the company is expanding its peer-to-peer rental market into the luxury category.

A Collective Voice Against Tariffs

Organizations in the E.U. and U.S. have issued a statement ahead of next week’s Brussels Summit urging for the termination of retaliatory tariffs.

ABYC Free Webinar Series Returns

The association’s online learning events will continue with “Fuel System Troubleshooting” on June 17.

Getting to Know the Newbies

At last week’s Partners Outdoors symposium, RBFF’s Stephanie Vatalaro shared information that can help the marine industry get to know its new audiences.

Switching to Compostable Bags

Foul-weather gear maker Grundéns will start using eco-packaging that you can cut up and use in the garden.