Markets

U.S. Consumer Confidence Surges - But Why?

If there is one thing I have learned in my (almost) 25 years, it is that I do not know anything. Take consumer confidence , for example, which in November logged its biggest monthly gain since April 2003.

The Conference Board's November index of U.S. consumer confidence increased precipitously from October, surging from 40.9 to 56. The reading was so high that it surpassed even the most optimistic forecast of analysts surveyed by Bloomberg News.

Is anyone else as confused as I am?

Perhaps their newfound confidence was inspired by the U.S. unemployment rate , which remained above 9 percent. On the other hand, a number of government poverty indicators hit record highs and the perplexingly titled 'supercommittee' failed to agree on anything at all - including what issues they failed to agree on.

But who cares what prompted the spike in conviction ? Investors certainly did not: U.S. stocks posted their biggest gain in a month for the Standard & Poor's 500 Index. To be fair, analysts attributed to the uptick in equities to mounting optimism surrounding an upcoming meeting of European finance ministers aimed at quelling the continent's sovereign debt crisis. European Union leaders have failed for more than a year to prevent debt woes from enveloping member nations, but this time will be different!

Admittedly, talks among European leaders could fall short and contagion could spread, walloping the U.S. banking sector and eroding credit . U.S. home sales, which are already anemic, would nosedive, likely triggering another recession .

I'm confident, though! Aren't you?

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.