- Prior month 64.4
- current conditions at 77.5 versus 70.4 estimate and 69.0 last month
- expectations 69.4 versus 61.8 estimate and 61.5 last month
- one year inflation it rises to 3.4% from 3.3% last month
- 5 year inflation expectations rises to 3.1% from 3.0% last month
The knee-jerk reaction is for yields to move a bit higher with the 2-year now up 11 basis points. The 10-year yield is up 5.4 basis points. Both are trading near highs for the day.
From Univ of Michigan’s Director Joanne Hsu
Consumer sentiment rose for the second straight month, soaring 13% above June and reaching its most favorable reading since September 2021. All components of the index improved considerably, led by a 19% surge in long-term business conditions and 16% increase in short-run business conditions. Overall, sentiment climbed for all demographic groups except for lower-income consumers. The sharp rise in sentiment was largely attributable to the continued slowdown in inflation along with stability in labor markets. As seen in the chart, sentiment is now about halfway between the all-time historic low of 50 from June 2022 and the February 2020 pre-pandemic reading of 101.
Year-ahead inflation expectations were little changed, inching up from 3.3% in June to 3.4% in July and down from the high point of 5.4% from April 2022. Long-run inflation expectations were also virtually unchanged from June at 3.1%, again staying within the narrow 2.9-3.1% range for 23 of the last 24 months.
The final survey result will be released on Friday, July 28, 2023 at 10am ET. The preliminary data was obtained (apparently) before the better than expected CPI and PPI data. All things equal it will be curious to see if the final inflation data is influenced by the CPI headlines Conversely, stocks continue to surge which puts more money in pockets of consumer (wealth effect) could be a tail wind for inflation expectations.
Gas prices which can be a big influence on consumers views on inflation, have been steady nationwide over the last month
The US dollar has moved modestly to the upside.
In the US stock market, prices are little changed
- Dow industrial average of 161.00.47 percent
- S&P index up 13.4 points or 0.3%
- NASDAQ index up 68 points or 0.48%
Looking at some of the individual stocks:
- Nvidia continues its surge to the upside. It is up 3.65%
- AMD is up 3.62%
- Google is up 1.4%
- Microsoft is up 1.48% after getting an upgrade
- Oracle is up 1.57%
J.P. Morgan, Citigroup and Wells Fargo reported earnings this morning.
- J.P. Morgan shares are up 1.44%
- Citigroup shares are down -1.64%
- Wells Fargo shares are up 0.85%