The American Consumer Is Setting Records (Again)

The American consumer is setting records (again)... The single biggest online shopping day in U.S. history... Dow 24,000 is here... Small caps are outperforming again... Must-see: 215% average gains and no losing trades...

The American consumer is setting records (again)...

Last year, we noted that retail sales over the long Thanksgiving weekend – including Black Friday and Cyber Monday – had surged to new highs.

This year was another for the record books... The five days from Thanksgiving to Cyber Monday saw a record 174 million total shoppers, up from estimates of 164 million last year during that time, according to the National Retail Federation ("NRF"). And once again, the records were driven by dramatic growth in online shopping.

While estimates show in-store shopper traffic declined slightly year over year, online sales absolutely surged...

Online sales on Thanksgiving Day rose 18.3% to a record $2.87 billion, according to data from Adobe Analytics. Black Friday sales rose 16.9% to a record $5.03 billion. And Cyber Monday sales 16.8% to an incredible $6.59 billion, making it the single biggest online shopping day in U.S. history.

Just like last year, mobile online shopping – defined as shopping from handheld devices like smartphones and tablets – accounted for a huge portion of this growth.

Mobile shopping accounted for more than 40% of Black Friday online purchases, according to retail-marketing firm Criteo. And even on Cyber Monday – where folks have typically taken advantage of their employers' high-speed Internet connections to shop via desktop – mobile accounted for 30% of sales for the first time. As Taylor Schreiner, director of Adobe Digital Insights, noted on Tuesday...

The past Cyber Monday behavior of shopping on your work computer during the day is almost completely reversed. This year, mobile shopping was dominant both in the morning and afternoon, and desktop only staged a comeback in the evening when people were home.

To nobody's surprise, online-retail giant Amazon (AMZN) continued to dominate...

According to data from marketing firm Hitwise, Amazon accounted for nearly half of all online sales over the five-day weekend.

While it has not released sales data publicly, Amazon itself said that this Cyber Monday was the single biggest sales day in its history. The company also noted that mobile sales surged more than 50% year over year.

Of course, online retail still has a long way to go...

Despite massive growth in e-commerce in recent years, in-store shopping still accounts for nearly 90% of all retail sales.

But the shift away from traditional "brick and mortar" retail is undeniable and inevitable, and holiday shopping is leading the way...

According to the NRF, online sales are likely to break $100 billion for the first time this holiday season. This would account for nearly 20% of all retail sales in November and December.

We believe the balance could shift far sooner than many believed possible. As Porter explained in the August 18 Digest...

I have no doubt that within 10 years, more than half of the retail space in America will no longer exist. And that's probably too conservative an estimate. The destruction in retail is likely to be far worse and occur far faster, like a 75% decline within five years.

My family doesn't shop in stores anymore at all... We buy everything – groceries, clothes, cars, toys, tools, services – absolutely everything online. I won't go into stores anymore. Not even for a pack of gum. Wegmans will bring me gum along with all my groceries within hours, and the workers stack them all neatly for me in my garage. They even put the food and drinks into my fridge for me.

The rest of the country is right behind me, walking away from the mall and from Target (TGT), too. Nevertheless, most people don't understand just how big of a change this will be for the U.S. economy.

Another day, another new stock market record...

Retail sales aren't alone in setting new records. This morning, the Dow Jones Industrial Average broke above 24,000 for the first time.

This is the fifth 1,000-point "milestone" for the Dow so far this year, the most in any single year in history. The latest was also among its fastest to date... The Dow surged from 23,000 to 24,000 in just 30 trading sessions.

It was joined by the benchmark S&P 500 Index and the small-cap Russell 2000 Index in hitting new all-time highs today.

We should also note that the Russell 2000 is quietly outperforming again...

Regular readers may recall this index led the market higher following President Donald Trump's election last November. This is because the smaller companies in the Russell earn much of their revenues here in the U.S. As a result, they stand to benefit the most from the tax and regulatory reforms the Trump administration promised.

Of course, the opposite is also true... And these stocks underperformed for most of this year as hopes of reforms dimmed. The Russell is up just 14% in 2017, compared with nearly 18% in the S&P 500, more than 20% in the Dow, and nearly 30% in the tech-heavy Nasdaq Composite Index.

But that has recently changed as tax reform is suddenly back on the table... Over the past three months, the Russell is up more than 10%, versus less than 7% for the S&P.

This trend could continue...

The Republican-led House of Representatives passed its tax bill earlier this month. And the latest reports suggest the Senate could pass its own version tonight or tomorrow. This means a final bill could be on the president's desk before the end of the year.

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New 52-week highs (as of 11/29/17): American Express (AXP), Boeing (BA), Berkshire Hathaway (BRK-B), CME Group (CME), WisdomTree SmallCap Dividend Fund (DES), iShares Select Dividend Fund (DVY), Corning (GLW), iShares Core S&P Small-Cap Fund (IJR), iShares U.S. Home Construction Fund (ITB), iShares Transportation Average Fund (IYT), JPMorgan Chase (JPM), Lindsay (LNN), NVR (NVR), PowerShares High Yield Equity Dividend Achievers Portfolio Fund (PEY), PNC Financial Warrants (PNC-WT), Sysco (SYY), ProShares Ultra Financials Fund (UYG), and VF Corporation (VFC).

Another quiet day in the mailbag... Two more readers share their experience with Steve's True Wealth China Opportunities. What's on your mind? Let us know at feedback@stansberryresearch.com.

"I am currently ahead in my China account by $96,000 this morning (down from a high of $113,000). This was done with $250,000-300,000 invested in 7 months. Very good return." – Paid-up subscriber N.D. Cushman

"I have been with Stansberry since the original Pirate Investor and elected to go into the Alliance when it was first offered. It has been a great program. Earlier this year when Steve started his True Wealth China Opportunities, I received it as part of my Alliance [membership]. What a home run. So far this year since March 1, the following results have been achieved... 5.0%... 4.4%... 26.5%... 39.7%... 55.5%... 58.8 %... 73.9%... 81.6%... 85.9%... 104.6%..." – Paid-up Stansberry Alliance member Jim P.

Regards,

Justin Brill Baltimore, Maryland November 30, 2017