To be fair, those stimulus tailwinds are fading, and\neconomic growth momentum appears likely to slow down until more stimulus is\npassed and\/or a vaccine is widely distributed. The timing of either outcome\nremains uncertain.<\/p>\n\n\n\n
Even still, I believe the U.S. consumer remains an\nunder-appreciated positive, and I think spending will hold up in the coming\nquarters better than most expect. Here are three reasons why. <\/p>\n\n\n\n
_________________________________________________________________________<\/p>\n\n\n\n
Hard Data & Economic Indicators You Should Keep an Eye On!<\/a><\/strong><\/p>\n\n\n\n In addition to consumer spending data, there are additional\ndata points and economic indicators that you should pay attention to in this\nturbulent time. To help you focus on the hard data and other factors that could\nimpact your investments, I am offering all readers our just-released Stock\nMarket Outlook report. This report contains some of our key forecasts to\nconsider such as:<\/p>\n\n\n\n If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today! _________________________________________________________________________<\/p>\n\n\n\n 1. Households, Surprisingly, are in a Reasonably Strong Financial Position<\/strong><\/p>\n\n\n\n One key measure for how well households are holding up is to\nlook at debt payments as a percent of disposable personal income, which are now\nat a 30+ year low. <\/p>\n\n\n\n Household Debt\nPayments as a Percent of Income are Falling \u2013 A Good Sign<\/strong><\/p>\n\n\n\n Low interest rates are part of the equation. Many households have been able to refinance existing debt to make it more affordable, while others used the economic growth of the last decade to trim debt on balance sheets. While only about 50% of Americans own stocks, the market\u2019s surge in the last bull market also boosted net worth and improved many households\u2019 financial positions going into the pandemic. An economic rebound in the coming years \u2013 which I see as highly likely \u2013 should only add to this financial position and drive spending in the process. <\/p>\n\n\n\n 2. Steady Rebound in the Labor Markets <\/strong><\/p>\n\n\n\n Early in the pandemic, some economists were predicting an\nunemployment rate north of 20%, but the labor market proved more resilient than\nexpected. After reaching a peak of 14.7% in June, the unemployment rate fell\nback to 7.9% in September. Initial jobless claims \u2013 a key indicator of labor\nmarket health and improvement \u2013 has also been steadily declining, suggesting\nthe number of layoffs is easing: <\/p>\n\n\n\n I expect the jobs market to continue along this path, with modest improvements through Q1 2021. But I am also in the camp of seeing a surge in hiring once the pandemic risk fades, which I believe is likely to arrive sometime early-to-mid next year. Improvements to the job markets should correspond fairly tightly to gains in spending. <\/p>\n\n\n\n 3. Downstream Effects of Housing Market Strength<\/strong><\/p>\n\n\n\n Sales of previously-owned homes rose to a 14-year high in\nSeptember, continuing a bullish trend for housing that has persisted all year. Interestingly,\nmuch of the new growth is being driven by millennials, who previously had been reluctant\nto enter the housing market as family formation lagged and as they favored\nrenting. For the first time, millennials accounted for over 50% of new home\nloans. Many are migrating out of cities and into the suburbs\u2014with more space\nfor home offices.<\/p>\n\n\n\n Downstream effects of the housing boom have been evident in consumer spending on furniture, appliances, and home improvement, which has outperformed spending across most other sectors \u2013 a trend I expect to continue. <\/p>\n\n\n\n Bottom Line for\nInvestors<\/strong><\/p>\n\n\n\n Year-to-date, Consumer Discretionary stocks are up +23.4%,\nwhile Technology stocks are up +28.7%. No other sector has posted a return\ngreater than +9% for the year, and the S&P 500 is up +5.6% (through\nSeptember 30). The U.S. consumer remains resilient. <\/p>\n\n\n\n Gains in Consumer Discretionary have largely been led by e-commerce\ncompanies, but we have also seen marked strength in home improvement, home\ngoods, electronics, general merchandise retailers, and home builders. With more\neconomic growth ahead (in my view), slow and steady improvements to the labor\nmarket, and more fiscal stimulus in the pipeline, I\u2019m staying bullish on the U.S.\nconsumer. <\/p>\n\n\n\n To help you focus confidently on hard data and\nkey economic indicators that can help guide your investments throughout the\nrest of this year and into 2021, I am offering all readers our Just-Released\nNovember 2020 Stock Market Outlook Report. <\/strong> If you have $500,000 or more to invest and want to learn more about these forecasts, click on the link below to get your free report today! The economic recovery may be slowing down, but here are 3 reasons to bank on the U.S. consumer <\/p>\n","protected":false},"author":3,"featured_media":8874,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[63,71],"tags":[],"class_list":["post-8990","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mitch-on-the-markets","category-private-client-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8990","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=8990"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8990\/revisions"}],"predecessor-version":[{"id":10518,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/8990\/revisions\/10518"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=8990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=8990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=8990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
IT\u2019S FREE. <\/strong>D<\/strong><\/a>ownload the Just-Released November 2020 Stock Market Outlook<\/a>2<\/a><\/sup><\/strong><\/p>\n\n\n\n![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/12_pic1-1024x395.png\")
Source: Federal Reserve Bank of St. Louis3<\/sup><\/em><\/strong> <\/figcaption><\/figure>\n\n\n\n![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2022\/02\/8_pic2-1024x395.png\")
Source: Federal Reserve Bank of St. Louis4<\/sup><\/em><\/strong> <\/figcaption><\/figure>\n\n\n\n
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\nThis report looks at several factors that are\nproducing optimism right now and contains some of our key forecasts to consider\nsuch as:<\/p>\n\n\n\n
<\/p>\n","protected":false},"excerpt":{"rendered":"