The U.S. recovery may have tame inflation and weak capacity and production, but now have the most highly watched report of the day, which is actually not even a government economic report. The Reuters/University of Michigan survey of consumer sentiment has been released, and it is a preliminary reading for the month of June. That makes this more of a live reading than a measurement from May or prior months. Unfortunately, sentiment hit the brakes, and that is bad news for the markets.

Sentiment was at 82.7 on the preliminary June report, down from 84.5 from April and down from the 84.5 expected from Bloomberg. The range of economist estimates was 82.0 to 82.7. Suggesting that today is good but tomorrow is not expected to be good: the Current Index was 92.1 while the Expectation Index was 76.7.

What is interesting is that stocks rose on the news. A simple explanation is that bad economic news means less worry over the Fed tapering bond purchases and ending its quantitative easing measures sooner than expected. The Dow Jones Industrial Average is up 29 points at 15,205 and the S&P 500 is up four points at 1,640. The yield on the 19-year Treasury note is down to 2.12%.

Keep in mind that the University of Michigan report is based on questions each month from only 500 households on their financial conditions and attitudes about the economy. It is also revised at the end of the month.

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