Consumer confidence drops, new home sales fall

Yahoo Finance Live’s Julie Hyman breaks down consumer confidence data.

Video transcript

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BRIAN SOZZI: Welcome back to "Yahoo Finance Live" on this Tuesday morning. I'm Brian Sozzi alongside Julie Hyman and Brad Smith. No shortage of market moving news out this morning. Walmart slashed its guidance, stoking recession fears. General Motors earnings were mixed at best, while Coca-Cola served up a decent quarter.

Right now, still we're seeing stocks hang in there, all things being considered, especially that Walmart warning which is really sending shockwaves throughout the retail industry. Dow down close 120 points. Now, Julie, breaking news on the consumer.

JULIE HYMAN: Yes, we've got consumer confidence from the Conference Board coming in below estimates. 95.7 is the index from the Conference Board. 97 was the estimate. 98.7 was the prior rating. So we're seeing a drop month over month, and seeing it come in below estimates.

We also have new home sales below estimates, falling 8.1% to an annual pace of 590,000. We also had a revision lower for the prior month for new home sales. So seeing this continued sort of weakening of demand in the housing market as we see mortgage rates continue to push up, and continued hits to consumer confidence as well. So when we talk about-- and this consumer confidence number, by the way, is a July number. The new home sales is a June number, just to be clear here.

So definitely seeing this continued weakness amongst the consumer and continued weakness when it comes to what's going on in housing. And this all-- you know, as we talk about and sort of try to game out with the Fed is going to say tomorrow, and the thoughts about whether the-- we're gonna see Jay Powell soft pedal or not, I don't know. It's hard to see that happening even in the face of some of these numbers.

BRAD SMITH: The two things that stick out to me here, consumers mixed about the short-term labor market outlook. We were discussing some of the job cuts or at least reductions in hiring, most recently. And consumers, they are very much looking across their prospects for current employment or should they-- as we in the great resignation, saw people job hopping to new opportunities.

Perhaps we see more of that actually starting to trim a little bit and consumers saying, all right, you know what? I'm going to see where exactly I've got the most income coming in right now, hopefully ride that out, given some of the concerns that they're seeing around the labor market in the short term. And then additionally here, they're more pessimistic about their short-term financial prospects. So kind of marrying the two things together there, two of the things that jumped out at me from this Conference Board report as well.

BRIAN SOZZI: Yeah, I'll tie a bone here. I think everything we saw in this Conference Board report reflects some of the challenges that Walmart highlighted yesterday. That's why you have consumers out there buying five pairs of $10 socks.