All times low for consumer confidence

6/24/08

The bads of high energy prices, high inflation, and a weak labor market has sent consumer confidence to the lowest levels in 16 years. Top that off with the fact that the DOW cracked the March closing lows 11740 this morning and keep floating around that level. Bernanke will need to play smartly on balancing growth and inflation. Executive recruiters expect another 175k jobs to be cut from Wall Street. It is just Wall Street, not mention about other affected industries. Fed fund futures are pricing in a 90% chance of a rate hike in September. However, today's confidence numbers suggests that the market's expectations may be too optimistic. Most likely, I guess Dow could survive a bounce at 11740 level and to be waited the FOMC announcement tomorrow. The new trend may be more clear to see after 1:15pm tomorrow Chicago time. Also, this morning the Case-Shiller Home price indices declined sharply in April. All 20 large cities index was off 17.8% from the peak. This index trend tells us that housing prices are still in decline mode. There has no end to see the bottom yet. Folks, whoever want to buy any house that I suggest to wait. It is like catch a falling knife same as buying Citigroup stock all the way down. By the way, Citigroup stock value soon to make new fresh lows and going lower for the rest of this year. In additions, the VIX index is not in Fear mode yet. It could means more downside for US stock markets. Good luck on catch so called "Cheap Stocks" in your portfolio.