For decades the market has correlated closely with consumer sentiment. As people reported less optimism resulting in lower readings of the University of Michigan Consumer Sentiment index, stock market indices would also decline. An understandable correlation between how consumers feel and the stock market due to that consumer spending represents 66% of the US economy. However, in no time since 1951, when the University began reporting on consumer sentiment, have people been so dire than now. The only time that people were close to as pessimistic as they reported in June's reading was May 1980.
During this same period, 30-year national fixed mortgage rates averaged 7% and were above 9% in 1995. Unemployment was 5.6% in 1995 and slowly declined to 4.1% by December 1999.
Previous periods of far greater national financial stress have been experienced and, in all cases, were followed by economic recovery and stock market rally to new all-time highs that all are well below yesterday's close. It remains to be seen when and not if the next economic recovery and market rally will surpass January 2022 market record high.