Heading into the holiday season, all eyes will be on consumers to see if their spending will mirror their enthusiasm expressed in a variety of surveys. The recent macro data from retail sales to income and spending suggests a noticeable uptick in consumer demand.

However, lingering issues, including a slack in wages and high debt levels, have been impediments to increased spending.

The major credit card companies have posted earnings, paced by marked increases in credit card uses. Trepidation remains in the air, reflected in a decline in the likelihood consumers feelings will be rejected when applying for credit over the next 12 months. 

In October 2017, there was a 30.8% likelihood consumers would be rejected (that number is down from 38.2% a year earlier). Only 6.3% of consumers say they will actually apply for credit in the next 12 months, which is down from 7.4% in February 2016.

The question remains: is this trepidation related to delayed increases in wages or a longer lasting impact from the Great Recession?  Perhaps there isn’t as much trepidation as one would expect. The latest wave of brick-and-mortar retailers suggests consumers are back and they are going to the malls.

After the close on Monday, Urban Outfitters (URBN) continued the string of strong financial results from brick-and-mortar retailers. The company beat the Street on revenue, earnings, and comp-store sales and hiked guidance.

We get earnings results from a number of brick-and-mortar retailers, including Lowe’s (LOW) and Dollar Tree (DLTR), before the open, along with Burlington (BURL).

Additional earnings results include Palo Alto Networks (PANW), which beat across the board and offered strong upside guidance for the current quarter and the full year.

Today’s Session

Equity futures are pointing higher despite a spate of earnings that fell short from small brick-and-mortar names and so-so guidance from Lowes.

Getting Hammered on Earnings:

• DSW
• Signet
• Campbell’s

Meanwhile, Dollar Tree is edging higher underscoring the trend of recent strong showings from dollar store discount retail niche. 

Meanwhile, with the avalanche of sexual harassment and assault charges swamping the swamp, there isn’t a lot about tax reform, which is still in a precarious position.  I still think something happens, but potential senate ‘No’s’ are rigidly dug in, and understand the power they wield.