Michigan Sentiment Index Hits Highest Level Since 2007; VIX Falls Below 13

Bloomberg news reported that Consumer Confidence rose in May to the highest level in almost six years as an advancing stock market and cheaper gas prices helped lift Americans’ outlook on the economy.   The Thomson Reuters/University of Michigan preliminary index of consumer sentiment is reported to have risen to 83.7 in May, the highest since July 2007, from 76.4 the prior month, a report today showed.  …  Americans are enjoying lower prices at the pump, a rally in the stock market and a recovery in home sales, which are helping alleviate the effects of higher taxes and a package of federal spending cuts, known as sequestration, that threatens to take a toll on jobs. …

http://origin-www.bloomberg.com/news/2013-05-17/consumer-sentiment-index-in-u-s-rose-to-83-7-in-may-from-76-4.html

CHARTS FOR 3 INDEXES

It is interesting to compare the movements of three indexes that reflect sentiment – the Consumer Sentiment Index, S&P 500 Index and VIX Index.

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For example, in the year 2008 the VIX Index (based on SPX options) rose above 80 for the first time, while the Michigan Consumer Sentiment index fell below 60 for the first time since 1980.

This morning the VIX fell to below 13, as the (preliminary) Michigan Consumer Sentiment index reportedly rose to 83.7.

OPTIONS STRATEGIES

Do the changes in the sentiment indexes impact your investment outlook?  Are you more bullish or bearish on certain sectors after hearing about today’s sentiment index values?  You can learn more about options strategies at the CBOE’s Strategies and Education websites at   http://www.cboe.com/Strategies  and  http://www.cboe.com/LearnCenter