(Frontier Asset Management) The resurgence of the COVID virus and the looming conclusion to various stimulus programs and tax policies seem to be taking a toll on consumer confidence, which just hit its lowest level in nearly a decade, well below expectations (Exhibit A).
That shift in confidence is showing up in retail sales, which fell 1.1% last month compared with June (Exhibit B). The largest drop occurred in auto sales, but other categories such as clothing and furniture also experienced declines.
Perhaps contributing to the decline in consumer confidence is the specter of inflation hanging over the market. The July CPI number (unadjusted), while indicating less concerning core trends, was still well above 5% (Exhibit C).
Source: The Daily Shot®
Source: U.S. Census Bureau fred.stlouis.org
Source: U.S. Bureau of Labor Statistics fred.stlouis.org
All of the above notwithstanding, the S&P 500® recently doubled from the market bottom in March 2020 – the fastest such occurrence on record.
Note: Dates indicated total length of each bull market, and bars show the trading days each took to double. Covers post-WWII era only. Source: S&P Dow Jones Indices (bull market dates, S&P 500 levels), CNBC analysis (doubling time). As of August 16, 2021.
