The Data Keep Screaming “Small Caps”

The Data Keep Screaming “Small Caps”

Consumers keep spending … the tailwinds Louis sees pushing small caps higher … Jason’s bullish take on small caps … a retirement “accelerator” has opened

“If there’s one thing I’ve learned in my 47-year career in the market, it’s that you should never doubt the resilience of the U.S. consumer.”

So says legendary investor Louis Navellier.

Last week, the latest batch of retail sales numbers supported Louis’ takeaway. Here’s Bloomberg with a quick recap:

US retail sales strengthened in September by more than forecast in a broad advance, illustrating resilient consumer spending that continues to power the economy.

The value of retail purchases, unadjusted for inflation, increased 0.4% after a 0.1% gain in August, Commerce Department data showed Thursday. Excluding autos and gasoline stations, sales climbed 0.7%.

The sales figures cap another likely quarter of solid economic growth and consumer demand fueled by a hardy labor market.

All year in the Digest, we’ve been tracking the health of the U.S. consumer

On one hand, we’ve highlighted many indicators pointing toward the deteriorating financial condition of the consumer. On the other hand, shoppers are still opening their wallets, driving the economy forward.

Remember, consumer spending accounts for nearly 70% of our nation’s GDP today. Thanks in large part to this robust consumer spending, the Atlanta Fed’s GDP Now model estimates that Q3 growth will come in at 3.4% – a healthy economy by any measure.

Meanwhile, inflation has been falling for months. Yes, it’s proved stickier in recent weeks, but the longer-term trendline is undeniably “down.” And Louis believes it’s fallen so low that another 25-basis-point interest rate cut in November is “practically guaranteed.”

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