RPT-PREVIEW: US prelim July consumer sentiment seen down to 74.5

(Repeats item initially run on Wednesday)

WHAT: Thomson Reuters/University of Michigan’s Surveys of
Consumers preliminary reading on July consumer sentiment

WHEN: Friday at 9:55 a.m. (1355 GMT)

REUTERS FORECAST:

* Sentiment index is expected to dip to 74.5 in July from
76 in June. Forecasts range from 71.0 to 78.0.

* Current economic conditions gauge is also seen down
slightly from June at 84.0. It ended June at 85.6. Forecasts
range from 78.0 to 87.0.

* Barometer of consumer expectations is seen down at 68.4.
It ended June at 69.8. Forecasts range from 65.0 to 70.6.

FACTORS TO WATCH:

The surveys’ overall sentiment index in June was at the
highest since January 2008, and its gauge of current economic
conditions was at its highest since January 2008 as well.

However, recent economic data have pointed more toward the
view the economic recovery is stalling, and a
weaker-than-expected sentiment number could reinforce that
notion, especially when it comes to consumer spending.

The Conference Board’s index of consumer attitudes fell in
June from May, while the government’s report on non-farm
payrolls showed overall employment in June fell for the first
time this year.

Employment levels are considered key to a pickup in
consumer spending, which accounts for more than two-thirds of
U.S. economic activity.

“Consumers are hunkering down. Our savings rate is going
up, they’re not spending as much money. If the consumer thinks
we’re going to go into a deflationary period, the best place to
be is in cash or very short-term instruments, and that’s not
good for equities,” said Tom Schrader, managing director, U.S.
equity trading, Stifel Nicolaus Capital Markets, Baltimore.

MARKET IMPACT:

A weaker-than-expected consumer sentiment number could
pressure stocks just as the second-quarter earnings period gets
under way, while it could support the safe-haven demand for
U.S. government bonds and drive benchmark yields toward their
14-month lows below 3.00 percent.

A below-forecast report could pressure the U.S. dollar.
(Reporting by Caroline Valetkevitch; additional reporting by
Richard Leong)

RPT-PREVIEW: US prelim July consumer sentiment seen down to 74.5