Confidence among U.S. consumers increased in December for the first time in three months as companies slowed the pace of job cuts and stocks advanced.
Consumer expectation's or "confidence's" statistical correlation with equity performance is loose at best. Nevertheless, confidence numbers are almost always spun as a short-term equity market driver. A strong, negative correlation does exists between consumer expectations and gold, but this is rarely mentioned or examined. The correlation between consumer expectations and gold from 1968 to 1980 was -0.67. Since 2000, the correlation between consumer expectations and gold is -0.76. Confidence ebbs and flows during gold bull phases. The greater the flow during periods of spin-induced hype, the greater the ebb when reality returns.
University of Michigan Consumer Expectations and Gold:
Source: bloomberg.com
Source: bloomberg.com
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