Consumer Sentiment Fails to Boost These 3 Stocks

Despite the many headwinds facing America’s economy, consumers appear to feel more confident than they have in the past five years.

According to the Thomson-Reuters/University of Michigan consumer sentiment index, American’s perceptions of the outlook for the economy and employment increased to 84.9 in November, the fourth consecutive increase for the index. The reading is the highest since July 2007, and a substantial improvement from the 82.6 seen in the previous month. Economists were expecting the index to come in around 83 for November.

The measure of consumer expectations also hit its highest level in more than five years, climbing to 80.8, compared to 79.0 in October. Meanwhile, the current conditions index increased to 91.3, the highest since January 2008. However, most of the report and surveys used in the index reading were completed in early November, leaving doubt to how much it reflects the attitudes towards the presidential election, fiscal cliff and hurricane Sandy.

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RDQ Economics writes, “We question how much of November this survey could actually capture and, therefore, we doubt the aftermath of Hurricane Sandy had much of an impact on this report.” CRT Capital Group, an institutional broker-dealer, notes that “the data is somewhat questionable given that, while it is November data, the survey likely does not include the full extent of the recent downtrade in equities,” according to the WSJ.

Although consumer sentiment has been on the rise, some of the most recognizable names for consumers have seen their stock prices decline recently amid poor reports. Walt Disney (NYSE:DIS) and J.C. Penney (NYSE:JCP) were among the biggest losers on Friday, falling 6 percent and 7 percent, respectively. Disney reported fiscal fourth quarter sales that missed analysts’ estimates, while J.C. Penney announced its worst decline in same-store sales since Ron Johnson, the former Apple (NASDAQ:AAPL) executive, took over and began a turnaround effort.

Earlier this week, McDonald’s (NYSE:MCD) reported that global revenue at restaurants open at least 13 months declined 1.8 percent for October, its first drop since March 2003. Shares of the fast good giant fell to under $85 on Friday, their lowest level of the year.

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