View from the Observation Deck

1. The Conference Board's Consumer Confidence Index posted a reading of 62.0 in 6/12, up from 57.6 in 6/11, 54. 3 in 6/10, and 49.3 in 6/09. The index's trailing 5-year average was 60.4. (Bureau of Labor Statistics)
2. While consumer confidence levels are well-below their 5-year high of 111.9 in 7/07 (just prior to subprime mortgage meltdown), sentiments have turned for the better.
3. Investment capital has flowed into several consumer-driven S&P 500 subsectors so far in 2012, and many have been among the top 10 in terms of performance (see chart).
4. With the exception of Health Care Technology and Building Products, the remaining subsectors have a direct relationship with the retail consumer, in our opinion. 
5. And it looks like, for now, all roads lead to the home, with the Homebuilding subsector outperforming the other 131 S&P 500 subsectors y-t-d.