The January 2024 Consumer Sentiment Index data was released. The reading was 78.8, which was the highest since July 2021. It showed Sentiment rose 13% from December. Interestingly enough, December saw a 14% rise in sentiment from November.
This is the most important metric to watch in 2024, in my opinion.
We have earnings that are above trend and valuations are not cheap. The simple fact is that we need optimism to prompt consumers and businesses to spend. If they are excited to spend, they should be excited to invest if they see prices being pushed higher and higher in the market. Even if the prices are being pushed higher by their own spending habits.
Quite frankly, this is the type of reflexive response that can send markets on incredible bull market runs.