Michigan Consumer Sentiment Misses Expectations, SP500 Tests New Highs

Key Insights

• Michigan Consumer Sentiment declined from 67 to 62.
• Chicago PMI improved from 43.6 to 43.8.
• SP500 moved above the 4070 level as Treasury yields declined. 

Consumer Sentiment Drops As Consumers Prepare For A Recession

On March 31, traders focused on the final reading of Michigan Consumer Sentiment report for March. The report indicated that Consumer Sentiment declined from 67 in February to 62 in March, compared to analyst consensus of 63.2.

According to the report, “This month’s turmoil in the banking sector had limited impact on consumer sentiment, which was already exhibiting downward momentum prior to the collapse of Silicon Valley Bank. Overall, our data revealed multiple signs that consumers increasingly expect a recession ahead.”

Traders also had a chance to take a look at the Chicago PMI report for March. The report showed that Chicago PMI improved from 43.6 in February to 43.8 in March, compared to the analyst consensus of 43.4. While the report exceeded analyst expectations, it showed that business activity contracted for the seventh month in a row.

SP500 Tries To Settle Above 4070

SP500 moved above the 4070 level after the release of Consumer Sentiment data. Treasury yields are moving lower, and traders expect that Fed will be forced to be more dovish to provide additional support to the economy.

U.S. Dollar Index pulled back towards the 102.20 level as traders focused on the pullback in Treasury yields. The weak Consumer Sentiment report may put additional pressure on the American currency.

Gold continued its attempts to settle above the resistance at $1980. Lower yields and weaker dollar did not provide support to gold as it faced strong resistance below the key $2000 level.

For a look at all of today’s economic events, check out our economic calendar.