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Two Ways To Play: Consumer Confidential


Strengthen your portfolio in good times and bad.

According to The Wall Street Journal, consumer confidence in the U.S. fell to the lowest level since 1992.

The Conference Board's confidence index released today fell to 57.2 versus consensus estimates of 60.0, marking a 16-year low. May's reading was down from April's slightly revised figure of 62.8. As reasons for the drop in sentiment, Conference Board Research Director Lynn Franco cited weakened business conditions, a tough job market, and consumer worries about inflation further depleted the consumers' view of the overall state of the economy.

Franco added that with consumer worries are at an "all-time high," she believes that there is little likelihood of a reverse in sentiment in the next few months.

The conference board's present situation index, which shows the consumer's view of current economic conditions, also dropped to 74.4 this month from April's upwardly revised 81.9.

For more on these numbers, see Professor Kevin Depew's Five Things You Need To Know: Whom To Believe: Recession by the Numbers, or by the Pain?

From the Bull Pen: Bulls will favor companies with pricing power. Darden (DRI) restaurants has been named and should continue to be a favorite amongst bulls.

From the Bear Cave: Faced with a stressed consumer and an appreciating yen, bears continue to consider downside opportunities in companies like Honda Motor (HMC) and Toyota (TM).
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