The 2017 holiday shopping season is officially in full swing!
Early estimates suggest that while you might not have gone into as many stores over the holiday weekend, you were definitely shopping online: foot traffic at brick and mortar stores was down 1% compared to Black Friday last year, while online sales were 17% higher. This means online spending hit a record $5 billion according to Simply Money Advisors’ research.
It's expected that this week's Cyber Monday will be even bigger with $6 billion in estimated sales. This spending should help keep the U.S. economy growing at a healthy pace. After all, consumer spending makes up about 70% of the country’s Gross Domestic Product (GDP).
It's a busy week for the economy with reports on new home sales, inflation, manufacturing, and personal income and spending on tap. Wall Street will also be paying close attention to the 13 speeches given by members of the Federal Reserve (Fed), our nation’s central bank.
Fed Chair nominee Jerome Powell will testify at his confirmation hearing the morning of Tuesday, November 28th. As congressional lawmakers question Powell about his past and future, Wall Street will be looking for shifts in how Powell will run the Fed compared to the current Chair, Janet Yellen.
At Simply Money Advisors, we believe the Fed will raise short-term interest rates at its meeting on Wednesday, December 13th and two more times in 2018. This moderate pace of interest rate hikes should be good for the economy and your money.
The Senate is expected to vote on its version of tax reform this week; however, it's unclear if there are enough votes to pass it.
Further, there are many differences between the tax reform bills from House and the Senate. It will take time to “reconcile” these differences, meaning come up with a compromise. Simply Money Advisors expects tax reform to pass, but it may not happen in 2017.
The Simply Money Point
Many people will point to the drama surrounding tax reform, but the more important matter today is that the U.S. economy is healthy and there is little risk of recession. For you as an investor, this is good news since recessions are what kill stock market rallies.