University of Michigan Sentiment Unexpectedly Drops

The current conditions reading was 95.4, and the expectations was down at 72.2. In short, the reading is front-end loaded with expectations that are far less rosy that the current month.

May’s reading was 81.9, so there was a small drop in sentiment instead of a small gain that was expected.

Equity markets had been trying to recover ahead of the report on Friday morning, but the S&P 500 Index is back down 1.50 and the Dow Jones industrial Average is now down about 10 points.

As a reminder, this reading is the preliminary reading for June and it will be revised. We generally assume that the Conference Board’s reading of consumer confidence is more accurate, due to a much larger polling sample, but this is the first of the live sentiment readings of the month so it still moves markets.

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