• February 23, 2024

Strategist: Don’t be surprised to see double-digit retail sales growth

According to a fund manager strategist, US retail sales may have risen by double digits in March thanks to the $ 1,400 stimulus checks distributed by the federal government.

Jeffrey Schulze, investment strategist at ClearBridge Investments, has a forecast ahead of the data’s release by the trading department on Thursday. Economists polled by Dow Jones Newswires and The Wall Street Journal expect a 6.1% increase.

Schulze noted that the $ 600 checks received in December increased retail sales by 8% in January. “This stimulus package was 2.5 times the size,” he said.

He said the U.S. would achieve herd immunity sometime in the second quarter. “And when herd immunity is achieved, it will trigger a consumer spending tsunami,” he said.

FactSet / ClearBridge Investments

The valuations of stocks, he argues, are not stretched. “If anything, analysts expect too little earnings growth in 2021 and 2022,” he said. Analysts were behind the curve in Q2, Q3, and Q4 2020 and he expects further upward revisions in earnings.

However, he noted that the markets are often volatile in the second year following a bear market low. If an overshoot in the 10 year return
BX: TMUBMUSD10Y

materialized, that could also unsettle the markets.

The S&P 500
SPX, -0.41%
was slightly higher on Wednesday after ending at its 21st record high of 2021 on Tuesday.

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