Energy exchange traded funds were the top-performing sector ETFs in Tuesday’s stock rally as top holdings Exxon Mobil (NYSE: XOM) and Chevron (NYSE: CVX) added more than 1%.
U.S. stock ETFs shook off a report estimating consumer confidence fell in June to the lowest level in nearly a year. Homebuilder ETFs traded higher after the S&P/Case-Shiller indexes showed U.S. home prices reversed course and rose in April. In other housing data, investors will get a report on pending home sales on Wednesday.
Consumer confidence in the U.S. has seen a drop off of 4.7%, according to Economy Watch. The Real Time Consumer Confidence Index saw a drop from 570 to 547 this month. The Bloomberg Consumer Comfort Index fell from -44 to -44.9 over the past week. A growing sense of doom in the U.S. is attributed to the notion that economic conditions will worsen before they get better.
IHS Global Insight concludes in its own forecast that “the consumer mood has become more pessimistic due to poor payroll numbers, a further decline in home prices, increasing non-energy prices, and an unsettling stock market. Consumer confidence is at depressed levels and consumer spending is looking very weak, ” reports NPR.
Growing pessimism and a lack of confidence is contributing to the depressed spending. Consumer spending accounts for about 70% of all economic activity within the U.S.
“Since the S&P 500 has fallen in seven of the last eight weeks, however, the market may be ripe for a counter-trend rally, particularly since the bar has been set so low heading into Q2 earnings reporting season,” wrote S&P Chief Investment Strategist Sam Stovall, who notes Wall Street analysts have taken earnings estimates down roughly 0.6% in the past month, according to data from CapitalIQ, reported by The Street. [Consumer Staples ETFs Weather the Sell-Off.]