Will There Be a Spring Stock Market Slide?
The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
In both 2010 and 2011 an early run-up in the stock market, similar to this year's, pushed stocks up about 10% for the year by mid-April.
Chart 1: Economic Surprises and Market Performance
Citigroup Economic Surprise Index and S&P 500 Less 10-Year Treasury 3-Month Total Return The Citigroup Economic Surprise Index is an unmanaged index and cannot be invested in directly. Past performance is no guarantee of future results. 3. Consumer confidence (red) -- In 2010 and 2011, early in the year the daily tracking of consumer confidence measured by Rasmussen rose to highs just before the stock market collapse as the financial crisis erupted. The peak in optimism gave way to a selloff as buying faded. Investor net purchases of domestic equity mutual funds began to plunge and turned sharply negative in the following months. This measure of confidence is once again beginning to fall from the highs.
Chart 2: Consumer Confidence
Rasmussen Daily Consumer Confidence Index Source: LPL Financial, Bloomberg data The Rasmussen Daily Consumer Confidence Index is an unmanaged index and cannot be invested in directly. Past performance is no guarantee of future results.
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