If you're betting against the American consumer, you're dead. Anyone who suggests otherwise is either wrong, lying or some sort of perma-bear buffoon selling an overpriced newsletter.
Look at Walmart (WMT), out this morning with better than expected earnings of $1.15 vs $1.12 estimates. The stock is higher pre-market. Bears will complain that revenues weren't great. To them, I say "no kidding." The company just announced that Christmas promotions would essentially never stop, ever again, forever. That kind of manic promotion doesn't lead to a lot of sales growth when you have 100% market penetration the way Walmart does.
This isn't about Walmart though. I don't like the stock but I love it as a consumer tell. To that point here's what Walmart's U.S. CEO Doug McMillan had to say about shoppers:
I'm encouraged by our performance during key seasonal events. We had strong back-to-school... and we ended the quarter well by executing a strong Halloween event.
Strong Halloween at the lower end of consumer retail. Throw every gloomy consumer warning you hear in the trash. Walmart customers don't buy stupid Halloween costumes unless they're feeling at least a little flush.
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From an investing perspective look at the price action on Macy's (M) yesterday. The company missed estimates for the first time in six years and the stock rallied 5%.
You can whine about that being "stupid" but it's really about supply and demand. We saw two big flushouts in shares of Macy's over the last few months. That told us where the skeptics were. When Macy's came in better than tragic the bulls were in charge and the haters had to cover.
Related: Why Macy's is set up to win this holiday season
Another play, and this one I'm long, Lululemon (LULU). Shares were up 5% yesterday on word that women like yoga pants. The stock is up 15% in three months and it's STILL negative for the year.
This is a battleground name where the bears have again placed their bets. What the shorts don't understand is that Lulu doesn't have to be great to beat. A strong consumer will sell Lulu's pants for them. Even in a worst case scenario in terms of execution Lulu will be propped up by demand. That's bullish.
The calling card of this portion of the rally is "less thinking, more buying." If that doesn't make sense to you, it's probably best for you to sit this out for a bit.
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