What's Keeping The Economy Elevated? A Strong And Determined Consumer

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Posted: Jul 16, 2019 9:52 AM
What's Keeping The Economy Elevated? A Strong And Determined Consumer

Source: AP Photo/Ebrahim Noroozi

The stealth rally continues, and it remains unloved, and I suspect those that are long this market are loving the fact this remarkable run is ignored and dismissed.   

  • S&P 500 +20.2%
  • Dow Jones Industrial Average +17.3%
  • NASDAQ Composite +24.5%
  • Russell 2000 +15.8%

The mavens that have missed the move continue to be wrong on everything from the Fed to the consumer.  But the stock market, not the mavens, continue to anticipate that a strong and determined consumer keeps the economy and stock market elevated.   

See the late move yesterday in Consumer Discretionary, as Amazon (AMZN) and Walmart (WMT) shares reflect the fact there can be more than one winner in the Internet era of shopping.

Late Surge

4:00 PM

2:00 PM

S&P 500 Index

+0.02%

-0.13%

Communication Services (XLC)

+0.02%

-0.27%

Consumer Discretionary (XLY)

+0.32%

-0.10%

Consumer Staples (XLP)

+0.23%

+0.13%

Energy (XLE)

-0.90%

-0.69%

Financials (XLF)

-0.57%

-0.58%

Health Care (XLV)

+0.22%

+0.26%

Industrials (XLI)

-0.41%

-0.45%

Materials (XLB)

+0.07%

-0.19%

Real Estate (XLRE)

+0.13%

+0.34%

Technology (XLK)

+0.33%

+0.10%

Utilities (XLU)

+0.40%

+0.13%

Retail Sales

Retail sales came in much better than expected, and the so-called control group is up enough to move 2Q 2019 GDP needle.

Interestingly, splurging reflects confidence in restaurant and bars versus eating at home, while the surge in Internet continues. But, the death spiral in department stores also continues, -1.1 month to month and -5.2% from a year ago.

Retail & Food Sales

June 2019

M/M

Y/Y

Headline

+0.4

+3.4

Ex-Vehicle

+0.4

+3.3

Ex-Gasoline

+0.7

+3.9

Ex- Vehicles & Gasoline

+0.7

+3.8

Vehicle

+0.7

+4.1

Furniture

+0.5

+0.8

Electronic

-0.3

-5.0

Building Materials

+0.5

-2.5

Food & Beverage

+0.5

+2.9

Health & Personal Care

+0.5

+5.5

Gas Station

-2.8

-1.7

Clothes

+0.5

-0.9

Sporting Goods

+0.0

-3.3

General Merchandise

+0.2

+2.5

Miscellaneous

+0.6

+3.2

Internet

+1.7

 

+13.4

Restaurants & Bars

+0.9

+4.0

Portfolio Approach

Communication Services

Consumer Discretionary

Consumer Staples

1

4

1

Energy

Financials

Healthcare

1

2

1

Industrial

Materials

Real Estate

2

3

1

Technology

Utilities

Cash

3

0

1

 

Today’s Session

Look at JB Hunt (JBHT) and remember the observation I shared yesterday.   Right now, this is the stock of the day.