WHAT: Thomson Reuters/University of Michigan's Surveys of Consumers preliminary reading on November consumer sentiment WHEN: Friday at 9:55 a.m. (1455 GMT) REUTERS FORECAST: * Sentiment index is expected to edge up to 69.0 in November from 67.7 in October. Forecasts from economists polled by Reuters range from 66.0 to 75.0. * Current economic conditions gauge is seen up at 77.0 from 76.6 in October. Forecasts range from 74.0 to 78.5. * Barometer of consumer expectations is seen up at 63.5. It ended October at 61.9. Forecasts range from 60.0 to 66.0. FACTORS TO WATCH: Sentiment likely improved in early November from October, but it ended last month at its weakest level since November 2009, with consumers expressing discontent ahead of the Nov 2 congressional elections. The median Reuters forecast of 61 economists for preliminary November sentiment is 69.0, up from 67.7 at the end of October. "Consumer confidence has come down about 10 points or so since peaking back in the summertime. The best you can say about confidence over the past few quarters is despite increased worries about a double-dip recession in the summer, confidence levels pulled back but stayed above the lowest levels of the recession," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut. Economists blame weakness in sentiment largely on the high unemployment rate. In last Friday's jobs report from the U.S. government, the unemployment rate stayed at 9.6 percent for a third straight month, even though job gains were much stronger than expected. "The housing market remains weak, bank lending has been anemic, there are worries about tax rates in 2011, but ultimately, the biggest issue facing the economy and investors is job growth," Sheldon said. Consumer spending typically accounts for about two-thirds of U.S.
economic activity and is considered critical to the recovery. MARKET IMPACT: A stronger-than-expected reading could be supportive for stocks and for the U.S. dollar against the euro, which has weakened this week amid worries about Ireland's high debt burden. In the Treasury market, investors might unload long-term bonds if consumer sentiment improves on better job conditions and rising stock prices. Less consumer pessimism could portend more spending and corporate profits in the coming quarters, which would make stocks and risk assets more attractive than low-yield bonds. Stocks this week have eased back a bit from their recent rally. The Standard & Poor's 500 index still is up about 16 percent since the Aug. 31 close. (Reporting by Caroline Valetkevitch; additional reporting by Richard Leong; Editing by Dan Grebler) Keywords: USA ECONOMY/SENTIMENT (firstname.lastname@example.org; +1 646 223 6393; Reuters Messaging:email@example.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.
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