Downtrend In European Consumer Confidence Drags Stocks With It
Today’s worse than anticipated drop in the Eurozone’s flash consumer confidence indicator– from -6.3 last month to -8.8, compared to a consensus -6.7– caps off a week of relatively weak data from the European region that only seems to confirm the central bank’s growing concerns. Unfortunately for already downtrodden markets, the drop in confidence would suggest that there is further downside to fear:
Historically, as confidence has fallen from a one-standard deviation high, the MSCI Europe Index has also declined rather significantly. Not that we have been particularly hopeful for the region as a whole anyway, but this indicator certainly does not bode well for any meaningful positive moves in overall European equities.