Consumer Confidence Jumps to 16-Year High - Too Good For Our Own Good?

It's not a record high, but the highest consumer confidence reading since the year 2000 is more than a little noteworthy. On Tuesday, the Conference Board released its March-2017 reading on consumer sentiment. The consumer confidence score jumped from 116.1 to 125.6. The last time it was higher was in December of 2000, right before the dot-com bubble popped. While the move higher extends a long-standing uptrend that started in 2009, the scope of the move was uncharacteristically high... perhaps dangerously high, indicative of a market top.

There's little doubt as to the prod - President Donald Trump's economic agenda is winning more and more people over. That said, the bulk of the Conference Board's polling likely took place before the bill that would repeal and replace Obamacare was shot down; consumers may have been most enthusiastic about the economic upside of that change. April's confidence reading may not be as bold.

It's also worth noting the Michigan Sentiment Index score has yet to mirror the Conference Board's reading. Although the third and final reading of the Michigan Sentiment Index won't be posted until Friday, preliminary readings peg March's score at 97.8. That's only a hair better than February's score of 96.3, which was down from January's level.

In other words, be wary.

That said, not surprisingly, the biggest improvement in consumer confidence came from those families earning more than $100,000 per year, who arguably have the most to gain from any economic boom. Households earning less than $15,000 annually to feel worse about the future than better.

The prospect of getting a job -- or getting a better job -- also seem better to all consumers.

Those emboldened consumers are already prepping to spend some of their wage increases, or new incomes from newly-won employment as well. The number of people planning to purchase a vehicle within the next six months grew from 13.7% to 14.1%, and the number of people that intend to buy a new appliance within six months jumped from 49.9% to 52.9%. The only soft spot was housing. The number of consumers with plans to purchase a home within six months fell from 6.5% to 6.0%.

In most regards the consumer sentiment score is an economic barometer that moves in tandem with the long-term market trend. This abnormally strong reading, though, leaves some investors wondering if the surge in optimism marks a peak -- at least a short-term peak -- for stocks. In the same sense traders tend to be the most optimistic at the worst possible time, consumer confidence could be mark an 'as good as it gets' scenario for the market.