Consumer Sentiment Cushioning Wall Street Landing

The consumer sentiment report released this morning highlights that consumer expectations are on the rise, up nearly 2 points to 80.8. Consumer believe that the economy has improved and that the worse is behind. It was the fourth month in a row that consumers’ moods have improved. Weather events across US have probably increased consumer expenditure in late October early November. But overall, consumer sentiment its at its highest level in the last 4 years.

It is great indication for the economy and businesses. The report has help the struggling Wall Street index to surge slightly this morning. Consumer spending accounts for more than two-thirds of the economy. Financial markets prefer when consumer confidence in the economy and specially their personal financial situation is high, the higher their confidence the more likely their spending will increase.

Wall Street has recover from an overnight sell off. Wall Street is currently up, the market sentiment is that today’s report will help the congress reach a reasonable agreement for the Fiscal Cliff. Today’s gains, if the market can hold on to it, will definitively help the current downtrend to bottom softly.

November and December could be difficult months to trade in. Hedging could a great idea, specially when uncertainty is so anticipated. Predicting where the Wall Street Index will land in the coming weeks will be a tedious task, as long as the Fiscal Cliff decision looms.

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