Consumer Confidence vs Stocks & Oil

by Ashraf Laidi

Feb 28, 2012 16:26

US February Consumer confidence a hit a 12-month high of 70.80, proving yet again that consumer confidence indices (Conference Boards consumer confidence and Univ. of Michigans consumer sentiment survey) are more impacted by equities rather than price of gasoline. The chart below clearly illustrates that rising oil and gasoline prices have weighed on consumer confidence mainly via the intermediation of falling equities. But a rise in OIL PRICE ALONE DOES NOT necessarily WEIGH ON CONSUMERS without a retreat in equities. Rather, we must gauge oils behavior RELATIVE TO OTHER COMMODITIES (as seen in yesterdays charts http://ashraflaidi.com/products/sub01/access/?a=607 in order to determine the true impact on the economy. Those charts showed that only when US crude peaked relative to a basket of commodities did equities begin to falter.

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