Friday, May 27, 2011

Consumer Sentiment Up For May, But Pending Home Sales Slump

The May reading for the Thomson Reuters/University of Michigan Consumer Sentiment Index showed a nice gain, jumping from April's 69.8 to 74.3. This month's reading was well above expectations. Credited for the rise was an easing of gas prices. The one-year inflation outlook fell from 4.6% to 4.1%, while the expectations barometer leapt from 61.6 to 69.5. The index of current conditions, on the other hand, fell from April's 82.5 to 81.9.

April's index of pending home sales, in contrast, tumbled to 81.9 from 92.6 in March; the latter number was revised downwards. This index measures signed contracts to sell existing homes. Although the weather was blamed, the drop suggests housing prices will fall further.

When these items were released, at 9:55 and 10:00 AM ET respectively, gold had already started pulling back from a new three-week high of $1,535. The metal reached that new high because of a leap, induced by the greenback turning downwards, that kicked in shortly after the equity markets opened. Gold seemed little affected by the news, slumping to $1,533 in that timeframe as it lost energy. It made a slightly higher peak a little later, prior to pulling back more.

No comments:

Post a Comment