The final University of Michigan Consumer Sentiment Index came in at 75.0 for January. That’s a sharp improvement from where it was last summer and fall, but it’s still in the lower part of the range over the past 30 years. Check out the fantastic graphic from Calculated Risk:
Source: Calculated Risk (click on chart to expand)
Maybe the world isn’t ending after all. One never knows exactly how investors will respond to economic data, but movement from low levels to consumer sentiment to high levels of consumer sentiment is usually associated with decent equity markets. The best entries tend to occur when sentiment is very poor—i.e., investors are perhaps overly pessimistic.
