Market sentiment check/The mood and behavior of the US consumer

Time for a stock market sentiment check with us back to the recent highs again and above the April 2^nd close. The CNN Fear/Greed index on the day before the 90 day pause on April 8^th closed at just 3. Defined as 'Extreme Fear' we could have also called it 'Extreme Panic' as it can't go below zero. Yesterday it was 62 about in the middle of the 'Greed' box. To be clear, this index is measuring what market participants are actually doing by measuring breadth, put/call, credit spreads etc...

Yesterday the AAII individual investor survey which just surveys mood, along with Investors Intelligence, still has Bears well above Bulls but a bit less so. Bears fell by 7.8 pts to 51.5, an 11 week low while Bulls rose by 8.5 pts to 29.4, a 13 week high. In the II survey, Bulls are almost back above Bears at 32.1 vs 28.8 last week while Bears rose a touch to 33.9 from 32.7 with those expecting a Correction down by 4.5 pts to 34.

Bottom line, the extreme bearishness post "Liberation Day" that set the stage for the post April 9^th rally since is slowly slipping away but certainly nothing extreme on the bull side. What this means for short term market action, I don't know but expectations it seems are elevated that all the trade worries will be solved by deals and all will be ok. I think the genie is not going back in the bottle.

Yesterday's April NY Consumer Expectations Survey reflected a cautious consumer with higher inflation expectations, a weakened job outlook and worries about their financial situation.

One yr inflation expectations continue to rise, moving to 3.6%, up 20 bps and to the highest since July 2022 which was around the peak CPI print. The further out 5 yr view slipped by two tenths to 2.7% though.

Expectations for higher prices was broad as they rose for homes, rents, gasoline, medical care, and cost of college while falling a touch for food.

Labor market concerns were evident as unemployment expectations rose to the highest since April 2020 at 44.1% right around the Covid lockdowns. While there was a drop in those believing they will lose their own job, if they do, "The mean perceived probability of finding a job in the next three months" fell by 1.9 percentage points to 49.2%, the lowest reading since March 2021. This decrease was most pronounced for respondents over the age of 60.