Market Does Some Quick Repricing

So the Conference Board's Consumer Confidence number for June was worse than expected, and suddenly all hell broke loose in the stock and FX markets, with the Treasury market having a bit of a more muted and lagged response. The consensus was for the index to rise to 56 from 54.8 in May. Instead the index fell to 49.3. Stocks fell, gold and oil dropped like rocks, the VIX awakened from its slumber, and the dollar rallied...

The value of consumer confidence data is suspect - it tends to rise and fall with the stock market and/or the general news backdrop, and attempts to derive predictive value from it have generally proved less than fruitful. Still, it's hard to resist the allure of consumer surveys. The most timely is the daily Rasmussen survey. The polls are taken pretty much every day and the results represent a rolling 3 day average. The Rasmussen consumer index reached a 2009 high of 77.2 on June 4th, and has been in the high 60s and low 70s since then. So why the consensus was for the Conference Board's number to improve over May, I don't know.

The other negative news item Tuesday, dated, but more substantive than the consumer confidence data, is that delinquencies on prime mortgages during Q1 doubled from a year earlier.

The takeaway would seem to be that for at least one data point, there was a large divergence between what the markets expected and what they got. It will be interesting to see how things close.