The Bears are Wrong: "The Consumer Is RE-leveraging," Jon Markman Says

The recent data is convincing; The U.S. consumer is making a comeback. New home sales jumped 27% percent in March, rising to a seasonally adjusted annual pace of 411,000, the Commerce Department said Friday. Meanwhile, durable goods orders (large manufactured products) rose the most since the 'great recession' began.

As sure as buying low and selling high is a winning formula, an American with money will purchase goods, says Marketwatch columnist and author Jon Markman. "Anybody who's bet against the American consumer over the long term has gone broke," he tells Aaron in this clip.

Markman believes renewed consumer confidence starts with an improving job market. In a recent column Markman writes, "household employment has increased at a rate of 371,000 jobs a month, on average, over the past three months - the strongest run in over three years."

Retailers are enjoying this return to form. "Retailers are already well on their way to their next bull market," says Markman, noting several retail indexes and ETFs have returned to 2007 highs. The breadth of recovery is also something Markman thinks is bullish. He notes stocks from mass marketers like Amazon and Target to high-end yoga retailer, Lululemon – are trading at or near all-time highs. (In the case of Lululemon, the stock has gone from less than $5 per share last March to trading near $44 per share today.)

It's a clear sign the bears are fighting a losing battle, Markman says. Contrary to popular sentiment, consumers are not deleveraging; "The consumer is releveraging," he says.


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