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Falling Consumer Confidence May be Signaling Stock Market Drop and a Recession

Almost six months ago consumer confidence in the U.S. economy was just about as high as it gets. Then consumer confidence as measured by the Conference Board  dropped amid a big stock market correction and worrisome economic news before rebounding earlier in 2019. Now consumer confidence is the worst in nearly a year.  Why is this so worrisome?    Jason at WWW.Sentimentrader.com illustrates in the chart below that  historically when consumer confidence “on their present condition goes from a multi-year high to the lowest in almost a year,” that has indicated there’s been a peak in “most (economic) cycles, usually leading to a recession.”

Falling Consumer Confidence May be Signaling Stock Market Drop and a Recession
Falling Consumer Confidence May be Signaling Stock Market Drop and a Recession

 

Falling Consumer Confidence May be Signaling Stock Market Drop and a Recession
Falling Consumer Confidence May be Signaling Stock Market Drop and a Recession

Brad Lamensdorf

Brad Lamensdorf, the founder and portfolio manager of Active Alts, is a principal and co-manager of the AdvisorShares Ranger Equity Bear ETF. He previously managed a long-short investment partnership from 1998-2005 under the name Tarpon Capital Management. Earlier in his career Mr. Lamensdorf was an equity trader/market strategist for the Bass Brothers’ trading arm. He managed a short only portfolio in addition to co-managing a $1bil hedging program. He also served as in-house market strategist for the entire internal and external network of Bass Brothers money managers.

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