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This morning’s initial read on US Consumer Confidence for the month of December came in positive again (both relative to expectations and on an absolute basis versus the prior University of Michigan reading).

The first chart below shows the sequential improvement from the November freak-out lows. The second chart provides the context for this improvement looking back at prior economic recessions. The point here is that if you are tracking bears, there is a lot of negativity already baked into their footprints.

Admittedly, it is getting harder for me to decipher whether or not the US consumer’s less than toxic confidence level is more about Obama or Bush. All of a sudden, Bush is providing American Capitalists with the economic foundations by which great business are built – cheap oil, zero interest rates, and a stock market that’s been cut in half.

On the confidence issue, Bush going away is probably as positive as Obama coming online. While Obama’s approval rating is destined to come down from its current level of 67%, I do not think the bears get fed on that thesis between now and the inauguration. Fully loaded with the January effect of bear hibernation, the January Obama 20th option remains one that I will be long, at a price. I like buying stocks, patiently, in the SP500 range of 864-884.

Confidence is where markets and multiples are built. We have our “Eyes On” sentiment readings and bad news bears alike.
KM