As you know, we do our best to let the data "talk to us" rather than superimpose our opinion on the data. Normally we tend to focus on the hard economic data, like the various PMI data we discuss early on each month or the monthly Retail Sales report, and to a lesser extent what is called "soft economic" data.
That group, which includes today's March Consumer Confidence report tends to reflect consumer intentions, which can be a bit tricky to capture, particularly since as we have shown time and again, we consumers can be a bit of fickle beast and our preferences have been known to change.
With that in mind, we have to be extra careful reading this latest consumer confidence print, which rose to 104.2 in March, well ahead of the 101.0 consensus and February's 103.4 figure. We say that primarily because of the timing in which the data was captured.
The cutoff date was March 20, just over a week after recent bank failures and the data may not fully reflect subsequent sentiment changes as those failures and efforts to shore up the banking sector made headlines. That's another reason to not put oh so much weight on the March data vs. February.
A smarter move will be to examine the trend in the data from the start of the year and the April data to see to what degree the banks failure shook consumer confidence. If the April data comes in little changed vs. today's March print, it would suggest the consumer was relatively unphased by the events, a positive sign for stocks. However, if we see the April Consumer Confidence drop precipitously, it could be a sign the consumer driven economy may have hit a speed bump in late March and the first half of April.
We can add that to our pile of items to watch in the coming weeks alongside the upcoming March PMI data, the March Employment Report, and as we've shared a few times already this week, bank earnings.