Wednesday, March 23, 2011

Stock Market: Cheerful Consumers, Hesitant Investors

The stock markets are hovering in the red again. As usual the media - and many investors - are focusing on the bad news: Japan, violence in Middle & North Africa, bad debts of the Eurozone. But the economic situation is getting better and the consumers are way more cheerful.

The proof: consumer focused companies, which concentrate on upscale markets, reported strong numbers this week . Today Inditex posted a 32% jump in profits (revenue plus 13%). This Spanish holding company owns the retail chain Zara, which sells upscale fashion worldwide. Especially in emerging markets such as China & India, the growth rates are very high.

On Monday Tiffany & Co. reported, that profit climbed in the last quarter 29%! They expect that their worldwide sales will rise this year 12% to 14%.

The consumer is the motor of the world economy. It seems that the weak stock market doesn`t reflect the strength of the economy. Maybe they point to a chance for clear-sighted investors.

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