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Consumer sentiment rebounds

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Consumer and most likely investor sentiment improved markedly in April as depicted by today's release of the Michigan Consumer Sentiment (preliminary), which jumped to a 93.2 reading and well above economist's forecast for a reading of 87.0.

The sharp rebound in the University of Michigan Sentiment is the second consecutive rise in consumer sentiment since the cycle low found in March of 77.6, which was the lowest sentiment reading since 1992.

While the major indexes did trade higher on the better than expected sentiment numbers, the major indexes found selling into the good news. Go figure as recent "bad news" regarding prior releases of economic data that disappointed versus economist's forecast found buying. Now... "good news" and a more upbeat consumer sentiment reading finds buying.

The Dow Industrials (INDU) 8,663 -0.55% is off 48 points, the S&P 100 Index (OEX.X) 474.72 -0.61% is lower by 2.9 points, the broader S&P 500 Index (SPX.X) 940 -0.62% is down 5.9 points, while the NASDAQ-100 Index (NDX.X) 1,150 -1.13% trades off 13 points with its Tracking Stock (AMEX:QQQ) $28.57 -1.17% losing 35 cents.

Treasuries are finding a strong round of buying again today, driving YIELDS to multi-year lows in the major maturities. After finding selling yesterday, the 5-year Treasury is finding buyers today and making a more formidable break higher on price to new highs, with its YIELD ($FVX.X) making a more noticeable move below its March lows at 2.448% YIELD today. In the "belly of the curve," the 10-year YIELD ($TNX.X) falls to another multi-year low in today's trade at 3.471%, while the longer-dated 30-year YIELD ($TYX.X) 4.45% is trading right at yesterday's multi-year low YIELD. Today's bond action would find a steeper YIELD curve, which normally portends a negative session for equities.

Market internals at the 11:00 AM EST mark on the NYSE have decliners outnumbering advancers by a 17 to 12 margin, but new highs easily outnumber new lows by a 118 to 1 margin. Yesterday's final tally for new highs/new lows on the NYSE was 254:4.

NASDAQ internals have decliners outnumbering advancers by an 8 to 5 ratio, with 98 stocks trading at new 52-week highs compared to just 4 stocks at new 52-week lows. Yesterday's final tally for new highs/new lows on the NASDAQ was 200:10.

Jeff Bailey

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