Is The Consumer Still King?
A quick note regarding the big rally in the Dow Jones Industrial Average yesterday. That 2.09% gain for the day was impressive but what is the basis for it?
Remember how over the past 5-6 years we've always been told that the consumer is driving our economy. Well, with the economic data showing a slowdown in consumer spending how can the stock market be rallying?
Listing to this clip from MarketWatch:
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I am thinking the same thing. Ask yourself this; what is the continued driver for higher prices ahead? Consumer spending numbers are slowing down. The real estate market has tremendous risk ahead. Inflation is moderating albeit at a very slow pace. What is the next super growth industry? Is it still the Internet? Web 2.0?
The bullish story we are being told is suspect. Ask around your personal sphere of friends, family, and co-workers. What is the current pyschology regarding the real estate market and everyone's feeling of "wealth" as they see a slow real estate market and falling real estate prices?
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