What Yesterday’s Reversal Means

We saw a nice reversal for stocks yesterday. Interestingly,
it came on the heels of the lowest consumer confidence number since February.
If you remember, stocks sold off hard at the end of January. By mid-February,
the S&P 500 was hitting 1,050.

A low consumer confidence number makes some sense when it’s
viewed in the context of a sharp decline for stock prices. But how do we
account for yesterday’s negative reading?

Basically, we don’t. Just between you and me, the “consumer”
is crazy. I don’t know exactly what kind of questions are used to come up
with the consumer confidence number, but there’s pretty much zero correlation
between what consumers think and the economy or stock market is doing.