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Consumer Sentiment: No Longer Selling Kidneys

Don’t wait for the big July jobs report Friday to get an accurate read on the state of the consumer. Just search Google with the right sentence fragments.

Nicholas Colas, the chief market strategist for BNYConvergEx Group, sent a note to clients today that analyzes the ‘autocomplete’ function of search engines such as Yahoo, Google and Bing to game the change in consumer sentiment form the beginning of the year until now.

google_search_sell_my_300.jpg
Source: Google

In January, typing in the phrase “I want to sell my…” was completed by the Google algorithm with the following words based on popularity: car, kidney, house, hair.

Running that same search today still yields “car” and “house,” but a slight improvement is seen as “kidney” has slipped down the rankings. Unfortunately, “dog” has replaced it. So the consumer is not so desperate as to want to sell their organs for cash, but they are considering ditching the dog. Colas also ran searches starting with “I want to buy,” “Stocks,” and “food stamps.”

“Overall, we can’t say that much has changed in search engine land to indicate better economic times,” said Colas, whose research notes are always unconventional and intriguing. “The only lasting spark that can change the cautious and thrifty sentiment is a better labor market. Thursday's data puts a bit of a pin in that hope.”

Weekly initial jobless claims shot back up to the highest since April, data showed Thursday, hitting stocks ahead of the release of the July Non-farm payrolls figure Friday. Treasury bonds rose.

“The state of the consumer is still bad, but not as devastating as it was,” said Tim Seymour, hedge fund manager and founder of EmergingMoney.com. “But I still don’t want be in the consumer names. Take a look at Unilever results.”

Shares of Unilever , maker of Dove soap and Hellmann’s mayonnaise, dropped after sales missed analysts’ estimates as the consumer traded down to generic brands.

“There is not much on the horizon to change these behavioral patterns,” said Colas, who believes this frugal environment favors bonds over stocks.

There’s a silver lining to this story, however. When Colas searched for the phrase, “I want to buy…” not only did “boats” and “iPads” show up, but also “dogs.”

“Hopefully, they can hook up with the people trying to sell them from the prior search,” said the strategist.

For the best market insight, catch 'Fast Money' each night at 5pm ET, and the ‘Halftime Report’ each afternoon at 12:30 ET on CNBC.

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Trader disclosure: On Aug 5, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Seymour owns (AAPL), (BAC), (BX), (GOOG), (INTC), (MOS), (POT); Terranova owns (AKAM), (APA), (BAX), (C), (COP), (EMC), (FCX), (GOOG), (GS), (JNPR), (MOS), (MSFT), (PFE), (POT), (SKX), (SU), (TER), (XBI); Finerman owns (AAPL); Finerman's firm owns (ARM); Finerman’s firm owns (BBY); Finerman's firm owns (LEA); Finerman’s firm owns (KFT); Finerman & Finerman's firm owns (RIMM); Finerman’s firm owns (TSX); Finerman’s firm owns (GYMB); Finerman’s firm owns (PLCE); Finerman's firm owns (WMT); Finerman's firm owns (DAN); Finerman's firm is short (IJR); Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Finerman’s firm owns S&P 500 puts; Finerman’s firm owns Russell 2000 puts

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