Friday morning will bring the preliminary Consumer Sentiment for the month of July. This is the University of Michigan’s report rather than the Consumer Confidence report from the Conference Board. By our count it is less reflective of a broader sentiment, but it is one of the first formal sentiment barometers that investors and economists get to deal with each month.

There is a discrepancy of what the actual consensus target is for the Sentiment reading due around 10:00 a.m. Eastern on Friday. Dow Jones has the consensus expectation at 95.5 and Bloomberg has the consensus estimate at 96.0. What will make this interesting now is that the prior report was 94.6 for June.

Now let’s consider what has happened in the world in the last three weeks. Greece has threatened to act as a potential euro-implosion device and China’s domestic stock market in Shangahi experienced something just shy of a miniature market crash. And all the while we keep hearing from Fed presidents and from Janet Yellen herself that the U.S. needs to start bracing for higher interest rates (finally!).

Sentiment has been strong and is expected to be strong ahead. As a reminder, there are the expectations and the current conditions factors that have to be considered, as well as the picture on jobs and income. The long-term inflation expectation is generally overlooked or discounted as being unimportant by the market.

The reason that the University of Michigan sentiment is questioned for validity is that it is a question-and-answer survey taken from only 500 households each month. The data is also revised at the end of the month for an update, and sometimes there is a very large discrepancy over the preliminary data versus the final and revised data each month.

Here is what the University of Michigan said on its last outlook at the end of June:

Consumers voiced in the first half of 2015 the largest and most sustained increase in economic optimism since 2004. Just as important, that same record was set by households in the top third of the income distribution as well as by the middle third and those in the bottom third of the income distribution. Moreover, the recent surveys recorded those same records when consumers were asked to evaluate prospects for the national economy, their personal finances, and buying conditions. Consumer spending will remain the driving force of economic growth in 2015. Overall, the data indicate growth in consumer spending of 3.0% in 2015.

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