Daniel Burns

U.S. consumer confidence sank to a record low this month, but not everyone is feeling so blue.

Confidence among higher-income earners, those making $50,000 and up, rose in January, according to Conference Board data. Meanwhile, the poorest Americans, earning less than $15,000 a year, were their most pessimistic ever.

The confidence gap between these two camps, shown in the graph above, can be telling.

Going back about 20 years, richer Americans are the most overconfident relative to the poor near the peak of an expansion and the least overconfident at the trough of a recession. December marked just such a trough -- for now, at least. Then, the survey's poorest respondents actually were more confident than those better off financially for the first time ever.

What's next? The end of the last two recessions has been signaled by a rapid widening of that wealthy vs poor confidence gap. January's data -- released Tuesday -- show just such a snap back.

People around the world watched Barack Obama's inauguration on Tuesday with anticipation and hope, but  the stock market took a bleaker view, with the major U.S. indices down more than four percent, the biggest-ever inauguration day stock market decline.

The stock market has historically fallen during inaugurations. The chart below, with an average 0.55 percent decline, shows the Dow's performance during planned inaugurations days since 1897; it does not include unplanned inaugurations after a president's death. Republican inaugurations are in red, Democrats in blue.

Do you have an explanation for the market's behavior? Leave your answer in the comments section.

Today marks the end of the Bush stock market.

He has presided over the evisceration of more than $4.6 trillion of U.S. stock market wealth as measured by the S&P 500.

By comparison, the S&P 500 gained more than $9 trillion in value under the eight years of Bill Clinton's administration.

We've seen a heavier-than-usual government hand in the form of interventions and rescues this year to steady credit market turmoil, starting with an emergency interest rate cut last fall by the Federal Reserve. But the overall trend for the stock market has remained down.

Feeling lucky? If you think the government intervention in Fannie and Freddie will impact mortgage rates, wager on your prediction here:

Will the 30-year mortgage rate fall this week after the rescue of Freddie and Fannie?

Lehman shares closed Tuesday near their lowest in five years. Since the year began, Lehman investors have lost more than $17.7 billion.

Lehman shares have dropped to just above $30, and Wall Street analysts have scaled back their expectations for the stock. Nevertheless, the average analysts' target price assumes the stock will rebound as much as 85 percent, according to Reuters Estimates.

Wall Street remains decidedly bullish on Lehman shares, despite its drop to near a five-year low and reports it needs to raise capital.

Credit default swaps, which rise as investors lose confidence in companies' financial condition, have climbed sharply of late, spurred in part by concern Lehman Brothers and other investment banks may need to raise additional capital, according to CDS dealers.

As a rule, women are more pessimistic than men. The pattern has been among the most consistent across years of tracking U.S. consumer sentiment in the Reuters/University of Michigan survey. Since the survey began tracking gender differences in outlook in January 1978, women have shown a higher sentiment reading just twice.

Things changed this month.

The long-term trend continued in May as overall consumer sentiment dropped to a 28-year low. Yet the mood among women improved slightly whereas sentiment for men soured for a fourth consecutive month, dropping to the lowest since 1980 (second graphic above). Moods darkened for men by the biggest margin in nearly three years, since the aftermath of Hurricane Katrina.

What's behind it? One factor at play is a diverging view of personal financial situations. Women in the survey indicated their situations improved modestly this month from April, albeit from a 27-year low. For men, however, May marked the seventh straight month of worsening finances. In fact, men rated their finances in the worst shape since the survey began tracking the differences between the genders.

Are high gas prices killing Americans' love affair with gas-guzzling SUVs? Looks that way.

In April, SUVs and light trucks took their smallest share of total U.S. vehicle sales in nearly nine years, and dealers sold more new cars than trucks for the second month running -- the first time that's happened since 2001. While many factors have teamed up to torpedo sales of high-ticket vehicles like SUVs -- tighter credit, a tough job market, slumping real estate values and a generally soft economy -- the fact that pump prices have soared to a record aren't helping, as the chart shows.

This trend might not easily reverse in May. Gas prices are up an average of 3 percent in the first two weeks of the month, with the latest weekly average pump price setting a fresh record of $3.72 a gallon, according to the Energy Department's Energy Information Administration.

Been paying more at the pump lately? Not to worry. It's just a figment of your imagination, new government data shows.

The U.S. Department of Labor's Bureau of Labor Statistics tells us that gasoline prices fell last month by 2 percent. This was the very same month when crude oil prices surged 11.7 percent and there was NO pass through at the pump? Hmmmm.

Meanwhile, another branch of the very same U.S. government, the Department of Energy's Energy Information Administration, contends average retail gas prices actually shot up 9.5 percent in April from March. Whoa!

Why the discrepancy?

It's the magic of so-called "seasonal adjustments" -- a practice employed by economists and other statisticians to smoothe out volatile month-to-month changes and give a supposedly clearer picture of the underlying trend within the numbers.

A look at the non-seasonally adjusted data from the BLS is closer to reflecting reality: It shows gas prices rose 5.6 percent last month.

Better, but that still understates the increase recorded by the EIA by 41 percent. Makes you wonder where the BLS buys its gas.

The S&P 500 snapped a five-month losing streak in April with its best showing in more than four years, gaining 4.75 percent on the month. Some see that as a sign of a turnaround for stocks, which appear to be near their cheapest in over a dozen years.

A closer look at stock valuations, though, indicates U.S. equities might not be such bargains.

Sure, the price-to-earnings ratio for the S&P remains around 14 times forward earnings estimates, near its lowest level since 1995. On the surface, it suggests stocks are a deal at current prices.

Here's the hitch: the S&P's P/E rose 5.14 percent last month, the biggest monthly jump in valuations in more than five years, yet at an 8 percent faster pace than the rise in the index. Stocks got pricier faster than stock prices rose. That's because the "E" in the P/E -- forecast company earnings -- continues to slide as analysts factor in such headwinds as the credit crisis and probable recession. That's rarely a good omen for equity fundamentals.

In fact, over the past two months, stocks have grown 6.8 percent pricier, while stock prices are up just 4.1 percent. The last time valuations grew so quickly relative to prices was in late 2001, when the S&P staged what turned out to be a 3-month bear-market rally. By January 2002, stocks were back on their way down and would tumble another 33 percent before hitting bottom 10 months later.

The latest data on new home sales paints another grim picture of the U.S. real estate market. The pace of sales of new single family homes and condos fell to its slowest in 16-1/2 years in March. Inventory of unsold homes would take 11 months to work off at the current rate -- that's the biggest inventory glut in nearly 27 years.

Yet that seemingly ugly situation could be a signal that the worst is over for the new home market. Only twice previously in the history of the new homes sales data series has the months' supply reading hit 11 months or higher -- April 1980 and September 1981. Both those occasions marked a turning point for the market: Inventories of unsold homes plummeted as the sales pace soon improved.

(Ed's note: This post was edited to alter an editor's headline to stress that one reading of the data suggests the worst 'may be' over in the housing slump, instead of one lonely signal that the worst 'is' over.)