the stock market has embraced the election outcome. it is less clear how the average american consumer feels about it. the university of michigan<u+2019>s consumer-sentiment index, out<u+00a0>wednesday, will offer one of the early takes on economic confidence immediately following the election. historically, a sharp rally in u.s. stocks would suggest confidence should be just fine. that isn<u+2019>t a given this time around, and it has implications for the holiday shopping season. economists expect the headline consumer-sentiment figure ticked up to 91.8. that would be up from a preliminary reading of 91.6 earlier this month, which captured only the pre-election mood, and higher than october<u+2019>s two-year low of 87.2. the survey, which questions 500 households about their financial conditions and feelings about the economy, suggests a healthy, but not exuberant, outlook. the stock market itself is often a reliable indicator of consumer sentiment, though cause and effect are unclear. since 1978, the 20 biggest, sequential gains in the sentiment survey came during months when the s&p 500 averaged a 1.5% gain. conversely, in the 20 months when the sentiment index had its biggest drops, the s&p 500 averaged a 2.7% decline. several recent investor surveys have turned decidedly optimistic. bullish sentiment in the american association of individual investors<u+2019> poll last week had its biggest surge since july 2010 . and more than 80% of 650 institutional investors polled by strategas research partners said the election outcome made them more bullish on stocks. but the stock market isn<u+2019>t everything. other measures of the overall consumer mood have been mixed. polling firm gallup found a record 77% of americans perceive the nation as divided , with respondents split on whether president-elect donald trump will do more to unite or divide the country. and optimism for mr. trump<u+2019>s presidency is far lower than the early results after prior elections, according to a recent poll by yougov. low gas prices, rising wages and improving household incomes offer reasons for hope. that might explain why gallup also found americans<u+2019> confidence in the economy a week after the election was higher than it had been for most of the past nine years that it has tracked this data. should that trickle into the university of michigan<u+2019>s sentiment data, it could be a good omen for consumer spending. but retail stocks have far outperformed the broad market<u+2019>s gains recently. investors shouldn<u+2019>t get overly sentimental. write to steven russolillo at steven.russolillo@wsj.com
the market loves donald trump, will consumers?  - wsj
steven russolillo