The Conference Board's Consumer Confidence Index crossed the wires at 86.6 for May, up marginally from the 85.7 figure from April. While the steep deterioration seen in recent months appears to have leveled off, the index remains well below where it was before the COVID-19 pandemic. Still, risk appetite continues to improve with the Dow Jones Index trading higher by over 600 points Tuesday morning, pushing the index to its best level since early March.

DOW JONES INDEX (5-MIN CHART)

Source: IG Charts

As stay-at-home orders across U.S. states continue to ease, investors applaud with the expectation that consumers will return to their earlier spending habits and jump-start the economy back to health. However, the labor market is still shattered, and it may be many months, even years before the country gets back to pre-crisis employment levels.

Meanwhile, the Conference Board data reveals that expectations are picking back up, despite the current labor market conditions. The expectations index within the survey ticked up to 96.9 from 94.3 the previous month. The Conference Board revealed that 43.3 percent of those surveyed expect business conditions to improve over the next six months, up from 39.8 percent in April.

CONFERENCE BOARD CONSUMER CONFIDENCE INDEX

Despite consumer confidence stabilizing, risks to the global macro landscape remain prevalent. The path of the virus remains highly uncertain, and many fear a second wave as, lockdowns across the U.S. and other countries ease. Adding to the uncertainty, tensions between the United States and China are shifting back into the forefront as Honk Kong protests reignite in the country. The Senate also passed new legislation last week aimed at increased oversight of Chinese companies listed on U.S. stock exchanges.