Nature of Humans – Stock Prices and the Consumer Sentiment Index
“Consumer sentiment sank about 11% last month, extending a decline that began with the start of the Iran conflict, and is currently about 9% below a year ago. Demographic groups across age, income, and political party all posted setbacks in sentiment, as did every component of the index, reflecting the widespread nature of this month’s fall. One-year expected business conditions plunged about 20% and is now 6% below last April. Assessments of personal finances declined about 11%, with consumers expressing a substantial increase in concerns over high prices and weaker asset values.” (University of Michigan’s Joanne Hsu).
But the S&P 500 reached new highs in the same month. Folks, that’s the first time ever consumer sentiment dropped to a record low in the same month the S&P 500 touched a record high. (Source: Bespoke)
This is my question; WHY? Why do people feel SO bad about the economy when the economy is doing so GOOD? Okay, so nobody likes war! I don’t like it either. But, if we’re going to go to war, isn’t it better to go all-out and win it, rather than just give it a half-effort? If the reports are correct, Iran has no more navy or air force. Their war-making manufacturing capabilities have been severely degraded, and they have third-string leadership vying for control of the country. In other words, they’re a mess! Yet, some politicians are saying, with a straight face, that Iran is winning? Are you kidding me? And it seems like the news media is just following right along with that narrative.
So, I guess it makes sense that people feel so bad, yet have it so good. If enough people start telling you you’re sick, you’ll eventually start feeling sick. That is The Nature of Humans!
Interesting Economic Information –
- In 2024, 31% of American Families were considered Upper Middle Class, more than triple the 10% share in 1979. Over the same period, the share of families considered poor or near-poor fell from 30% to 19%. “Upper Middle Class” is defined as a family of three earning between $133,000 and $400,000 in 2024 dollars. (source: American Enterprise Institute)
- January was a record month for IRA contributions at Fidelity in terms of both dollar amounts and the number of contributors; through 3/20, contributions were up 30% versus last year. More interest in ROTH IRA’s and higher savings rates for GenZ are driving the retirement account growth. (source: MarketWatch)
- A new National Small Business Association survey showed an optimistic employment picture: nearly one-third of small businesses expect to grow headcount over the next 12 months, with more than half of those anticipating increases of at least 5%. (Source: NSBA)
- A survey of 750 CFOs found that AI had little to no negative impact on employment in 2025. It may have actually added jobs. A LinkedIn analysis found that, not including construction-related jobs tied to the data-center buildout, AI led to the creation of 640,000 new roles between 2023 and 2025. (Source: WSJ)
- After falling 9.9% from its 1/27 peak to its 3/30 closing low, it took just 11 trading days for the S&P 500 to recover all those losses. This was the fastest recovery to new 52-week highs after a 5%+ decline in the index’s history. (Source: Bespoke)
