Sam Stovall, Chief Investment Strategist at CFRA, explains why U.S. consumers are still looking to spend.
Transcript:
CAROLINE WOODS: And just finally, because we have a lot of retailers reporting earnings this week, what’s your take on the consumer and how likely would you be to invest in the consumer at this point right now?
SAM STOVALL: Well, we are going to be getting some retail numbers out this week. At the beginning of the reporting period, expectations were really only for about a low single-digit earnings improvement. Now that earnings improvement is in the low double digits, really driven more by Amazon and the group called broadline retail. Other areas of strength are expected to be automotive retail and home furnishing retail, but still some weakness expected in apparel, computer, as well as other specialty categories. So in general, I think the consumer still wants to spend. What’s the old saying? Consumers will keep spending when the banks continue to lend. And that’s what they are doing, even though they are adding to their overall debt levels.
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