Thursday, April 11, 2013

Economy 2013: In Consumers We Trust III

U.S. stocks advanced, extending a rally in the Standard & Poor’s 500 Index to a fourth day, as retailers climbed amid rising March sales, reports Bloomberg (bloomberg). The Barron`s Blog "Stocks to watch" writes that several retailers, including Bed Bath & Beyond, Limited Brands (Victoria´s Secret) and Zumiez reported stronger March sales than expected (barrons).

It looks like that the engine of the economy, the consumer spending, is still on a solid growth path in spite of the sluggish general economic environment. The consumers are ignoring the mostly skeptical comments in the media. Instead they are responding to the economic tailwinds like healing job market (this morning we got news that the weekly jobless claims fell again close to the post recession low), the rally on the stock market and the rising home prices.

I reckon that this virtuous circle will continue for a while generating more gains on the stock market and further rising retail sales.

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