In the fast-paced financial market world, history gets started more quickly all the time.
Feb. 10. Twelve days ago. History.
So while enthusiasts for the growth of the U.S. economy surely want to take heart from the data on U.S. consumer confidence delivered earlier today by the Conference Board, the chilling reality is that date – Feb. 10. The Conference Board tells us in a press release: “The cutoff date for February’s preliminary results was Feb. 10, 2011.”
That means that the Conference Board’s Consumer Confidence Index, reported today at 70.4 for February, up from 64.8 in January, can’t take into account a particular lack of confidence expressed today through the price action in certain U.S. financial markets.
The Conference Board’s Expectations Index gained to 95.1 from 87.3 the prior month. The Consumer Confidence Index is at a three-year high.
Who knows? Maybe March will reveal a further increase in the index. Things have and can change again that fast. But the big news is that on Feb. 10 Libya didn’t mean what Libya means today.
The fighting in that country, with unknown consequences for Libya’s people and, in the worst-case scenario views that markets can adopt, for the rest of the area’s oil-producing nations, has changed the outlook.
Today for U.S. financial markets, Libya meant a nearly 180-point drop in the Dow Jones Industrial Average and a 6.4% increase in the most active crude oil futures contract to $95.42 a barrel.
This market consequence could be short-lived if the Libya crisis is somehow quickly resolved. A totally non-expert view based on reading the news makes that seem unlikely. Consistently high oil prices are inconsistent with a U.S. economy slowly getting back to real growth. Consistently high oil prices are inconsistent with further gains in U.S. consumer confidence.