Stock Market 2014: What We Can Learn From The Consumers

(Drivebycuriosity) -  How is the U.S economy doing? Thanks very well. This morning we learned that consumers are still on spending spree. In December retail sales increased 0.2% (plus 4.7% from December 2013). Excluding cars, demand jumped by the most in almost a year, reported Bloomberg (bloomberg). Thus they again disproved the gloomy predictions that holiday sales will be weak because consumers allegedly will cutting back.

The numbers show that consumers are still optimistic - in spite of all the fear mongering in the media. They are still benefitting from the healing job market (in spite of the sluggish numbers reported last Friday), rising home prices and the stock market rally (wealth effects).

This optimism is a good omen for 2014. I reckon that climbing consumer spending in the coming months will drive the whole economy higher which should translate into further rising company earnings & profits. Thus the rally on the stock market should continue in spite of all the skeptical comments in the media.

I think investors could learn something from the consumers.