Wall Street Today | US Consumer Confidence Drops to a Four-Month Low

US consumer confidence slumped to a four-month low in September, dampened by a deteriorating economic and labor market outlook. The Conference Board’s index declined to 103 this month from an upwardly revised 108.7 in August, data out Tuesday showed. The figure fell short of the median estimate of 105.5 in a Bloomberg survey of economists.

Expectations  that reflect consumers’ six-month outlook fell to 73.7, the lowest since May. A reading below 80 historically signals a recession within the next year.

Currently, six-month Treasury bills yield about 5.5% — the highest since 2001 — compared to the S&P 500’s earnings yield of roughly 4.7%. That’s the biggest advantage cash has enjoyed relative to equities since 2000, according to data compiled by Bloomberg.

While not quite an apples-to-apples comparison, it speaks to one of this year’s most urgent questions for money managers: do you hold your nose and dive into still-expensive equities, or hide out in cash and risk missing out on any rebound? With the Federal Reserve’s resolve to keep interest rates elevated for longer firmly cemented in the market psyche, investors are increasingly opting for the latter.

Oil settled near $91 a barrel, reversing earlier losses that were spurred by investors wrestling with the possibility of a prolonged period of higher interest rates. Traders continue to see signs of supply scarcity as the premium for near-term US oil barrels is hovering at the most expensive in over a year, indicating a market deficit.

“Crude looks well supported, with today’s initial declines being short-lived as the market rebounded around the highs from earlier this month,” said Craig Erlam, senior market analyst at Oanda. “We may still see more of a correction, but there’s no clear sign of sentiment turning bearish after such a strong rally over the summer.”