I get so mad sometimes that I have to walk away from my computer.
It happened again today when I saw a headline on Yahoo Finance that read:
Economists say a recession is coming: How can 401k investors prepare?
Sometimes you have to look below the surface of things to see what’s really going on. And perhaps the best case in point right now is your daily news feed.
There’s a lot of fear, uncertainty, and doubt (FUD) getting pumped out across the financial media, and it probably has some of you worried.
I’m here to tell you that, in fact, business is booming and the American consumer is stronger than ever. We just saw this in vivid fashion with record-setting Black Friday and Cyber Monday sales.
Instead of doom and gloom ahead, the indicators I’m tracking point to an outstanding 2020.
I don’t want you to miss out, so let me show you what I mean …
Based on the headlines, you might not know that the Dow Jones Industrial Average, the Nasdaq composite, and the S&P 500 all touched new record levels just last week. Stocks are headed for their best year since 2013.
Meanwhile, weekly jobless claims fell last week, and the unemployment rate is at historically low levels — 3.6%. The last time it was that low was in December 1969. Meanwhile, inflation has been below the Federal Reserve’s goal of 2%.
Wages increased 4.9% in October from the year prior, while the Commerce Department recently released its revised third-quarter GDP figures that show the economy grew at a 2.1% pace. That’s more than initially estimated, thanks in part to consumer spending.
Does that sound like an economy or a stock market in trouble? Quite the opposite.
Want more evidence? Here you go …
American Consumers Are Thriving
You probably know already that consumers are a crucial part of our economy. In the third quarter, consumers spent $14.7 trillion, adding up to about 68% of the whole U.S. economy. That was 2.9% higher than the second quarter.
A go-to gauge of Americans’ spending ability I also track is the result from Black Friday and Cyber Monday — the traditional kick-off to the holiday shopping season. This year, they’ve reached new highs.
Black Friday shoppers spent $7.4 billion online and $4.2 billion on Thanksgiving Day — a new record and 17% higher than 2018’s figures. Black Friday this year also set a new record for mobile sales, which came in at $2.9 billion. An eye-popping 61% of all online traffic to retailers came from smartphones, nearly 16% higher than last year.
Clearly, more and more shoppers are turning to the convenience of their phones to make their purchases. And even when they do visit the stores, consumers now buy 41% more online before going to pick up their purchases.
Those who did brave the crowds (and the weather) and flocked to the stores spent 4.2% more this Black Friday, especially on electronics and appliances, sporting goods, and clothing and shoes, according to Fiserv.
Another record reached on Black Friday? Order value. People spent an average of $168 on their purchases this year, up 5.9% from 2018’s figure.
One big winner was Nintendo (OTCMKTS:NTDOY), a company I recommend in Investment Opportunities. Sales of its Switch and Switch Lite gaming consoles have blown past 15 million units in North America since the products launched in March 2017 and have been best-sellers for the past several months.
Nintendo’s stock jumped Monday and today following good holiday sales figures, despite down days overall in the markets.
Retailers had worried that a shortened holiday shopping season this year would dent sales, so many began offering discounts a week earlier. The move paid off as U.S. consumers have dropped $72.1 billion online shopping since November 1, a big 16% bump from a year ago.
Cyber Monday had even better results.
Boosted by a late-night surge yesterday, shoppers spent a record $9.4 billion online, which Adobe Analytics said is a huge 19.7% increase from a year ago. Nearly a third of that total came from 10 p.m. to 2 a.m. ET.
As with Black Friday, consumers spent more on their Cyber Monday purchases this year than last — 6% more.
Amazon (NASDAQ:AMZN) had its biggest shopping day in history — and that’s saying something — as consumers snapped up their favorite smartphones, toys, movies, games, clothes, slow cookers … and even DNA testing kits from 23andMe.
By the end of the holiday season, Adobe estimates Americans will spend $143.8 billion.
These numbers don’t lie. Consumers only spend more when their economic position is stronger.
So keep that in mind the next time you hear the sky is falling. And please don’t let the doomsayers talk you out of the opportunities now and as we start 2020. Do what I do. Step away from the headlines, remember what’s really going on, and take advantage.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.