The stock market has been on a tear this year, with the S&P 500 (SNPINDEX: ^GSPC) rising by more than 9% heading into trading on Tuesday.
It’s been hitting record highs along the way, as investors remain fairly bullish on stocks as a whole
Valuations are high, however, and there is a bit of a disconnect between the markets and how well the actual economy is doing. One way to gauge economic conditions and how consumers feel about their financial situations is through an index of consumer sentiment. Last week, the index fell to a new record low, in a clear sign that consumers are worried about the economy.
It’s also a sign that investors shouldn’t ignore, as it could indicate trouble ahead for the stock market. The last time consumers appeared this worried, the stock market was in a free fall Due to the ongoing war in Iran and elevated oil prices, consumers are feeling more concerned than ever about their financial situations. The consumer sentiment index hit a new record low in May, with a reading of 44.8.