The conference committee’s consumer confidence index rose sharply from 85.7 to 98.0. This was the biggest month’s increase since 2009! Clearly, the progress of trade transactions and delays in implementing tariffs have spurred the increase. Furthermore, the rebounding stock market has boosted consumer confidence. However, please note that the index is off the lowest level since May 2020. The current situation index has risen slightly, but the expected index jumped from 55.4 to 72.8. The following line in the report shows the potential for more robust personal consumption.
Compared to April, purchasing plans for homes and cars and vacation intentions increased notably, with some significant gains after May 12. Plans to buy big-ticket items—including appliances and electronics—were also up. Dining out remains number one in spending intent, followed by streaming services, with plans to spend on films, theatres, live entertainment and sporting events the most up last month.
Also noteworthy in the report is that the average forecast of 12 months of inflation fell from 7.0% to 6.5%. Although still high, it suggests that initial expectations of tariff-induced inflation may be reduced. Although a month won’t be a trend, a potential reversal of consumer inflation expectations could provide some comfort to Fed members who are worried about inflation.
What to see today
Revenue
economy
Market trading updates
As It was noticed yesterdaythe market had reached more acquisition levels, both in momentum and relative strength. This is not a significant fix warning in itself, but it tends to suggest that the rise may be somewhat limited until pullback or integration occurs. However, one of the indicators we often see is As explained in X yesterday:
“On top @cvpayne Show, we were discussing Mentality of #retail #Investor. After the 2025 down day, the average gain of the S&P 500 0.31% indicates the strongest “by” response since 2020.
Of course, what’s interesting about that is the vastly different background from today until 2020.
As shown, the strength of positive money flows is usually seen at levels close to the peak of the short-term market. As MACD indicators and money flows rise, the risk of consolidation or withdrawal in June is more likely. We will be paying close attention to the flow over the next few weeks. If they start to decline sharply, the market will likely continue.
Keep an eye on the risk profile of your portfolio as the revenue season is over and the stock buyback window is preparing to close by mid-June. We are currently overweight cash and are looking for more strategic opportunities to deploy that cash in the near future.
Some graphs push one after another
Considering its importance, we share some graphs to understand that CPI may be much lower if CPI catches up to market prices and foundations in the coming months. First, however, with the exception of shelter prices, we consider that CPI is running at 1.4%, in perfect agreement with levels a few years ago of the pandemic. Furthermore, shelter price index within the CPI significantly delays real-time shelter prices.
- The first graph shows that the latest Caseschiller home price index has declined for the first time in two years.
- CPI Rent Sub-Index is increasing at a rate of 0.3% per month. However, apartment rents have remained flat for more than a year, according to apartment lists and other private sector rent indices. Additionally, Cleveland Fed’s new tenant rent index is a measure of current rent prices, and has declined over the past three quarters.
- The third graph shows rental vacancies are steadily rising, at the highest level since 2018.
- The final graph highlights the heated construction of more than five residential units. Therefore, the ongoing supply of apartments should help constrain the rental prices of apartments in the future.
Looking beyond traders, the story often determines price trends in the short- to medium-term. These stories, which can last for days, weeks, months, or even longer, are stories or themes that shape the way traders and investors interpret and respond to changes in financial markets. Simplify complex topics into easy-to-understand explanations. Sometimes the market narrative explains exactly why the market is moving in some direction. But otherwise, they prove to be false. Whether based on hard data or not, the market narrative can perpetuate market trends by shaping the behavior of short-term investors. Furthermore, as stories gain popularity, they are amplified by the media, and more recently by social media platforms.
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