U.S. Consumer Confidence: Positive Signals Continue in July, but Momentum Slow
The latest U.S. consumer confidence data for July show that the recovery from the April shock is continuing, albeit at a slightly slower pace. The intermarket analysis confirms this scenario.
By analyzing the relative strength between discretionary and staple consumer spending – as shown in the chart above – we can observe that the rebound from the April lows is ongoing, further supported by the upward crossover of the 50- and 200-day moving averages. This indicates an improvement in consumer confidence, with consumers more willing to purchase non-essential goods.
Looking at the performance of the two sectors relative to the main index, there is a general trend of weakness in both. The ratio with consumer staples (right-hand chart) has reached its lowest point since the beginning of the year and is showing clear bearish signals. The ratio with consumer discretionary (left-hand chart) has not confirmed the moving average crossover observed in the previous analysis and is now continuing in a sideways trend.
