QUICK QUILL — Oil movements guide economic sentiment. The Iran War ceasefire should generate a subsequent rally across multiple gauges, whether it’s investors, CEOs or surveyed consumers. Until the data catches up to geopolitical events, forward-looking Consumer Expectations are likely to be reflected as a downdraft in the University of Michigan survey. We remain cautious on consumer discretionary even as relief generates a short covering rally.
TAKEAWAYS
- Sentix Global Economic Expectations fell 22.4 points from February’s four-year high to April’s -6.6, the fifth-worst two-month decline on record; given Brent Crude has reliably guided the sentiment gauge, the post-ceasefire collapse in oil prices should improve investors’ spirits
- The RCM/TIPP Economic Optimism Index sank roughly 10% MoM to 42.8 in April, and only 3 of 21 demographic groups registered prints above 50; steep declines in the Six-Month Economic Outlook and Personal Financial Outlook indices bode poorly for UMich’s preliminary April data
- RCM/TIPP Outlook for Investors levitated at 58 in April vs. 45.9 for Non-Investors, with the former underpinned by the S&P 500; that being said, Investor Outlook peaked last September at 65.8, and the temporary relief from the ceasefire leaves consumer discretionary still vulnerable