Consumer spending is likely to pick up later this year, and retailers should be the prime beneficiary. As a result, analysts have started to recommend the group's top stocks. I've been bullish on top retailers for nearly a year, but the stocks have remained weak. Most recently, I wrote in August that the group was ready for a rebound, but the economic slowdown and the sharp drop in consumer spending postponed the recovery. I may have been early, but I still don't think I'm wrong.
Analysts are very much divided in their outlooks for the retailing group.
But a growing number of forecasters believe that the worst is over and expect that the stocks will soon rally in anticipation of improving consumer spending late this year. On Monda y, Goldman Sachs raised its ratings on nearly a dozen retailers. The case for a retailing rebound is straightforward. I expect that the Federal Reserve will cut interest rates fairly aggr essively in the first half of this year, which could make the pickup quite strong. The core growth rates for top retailers look impressive and their valuations are generally quite reasonable.