The consumer has never been stronger, and this could just be the beginning

The one thing we're watching over the next week is consumer strength. Our economy is driven by the consumer, and there are two big consumer-related releases over the next week – consumer sentiment and consumer confidence data.

The pattern in consumer attitudes can be a key influence on stock and bond markets. Consumer spending drives two-thirds of the economy; if the consumer is not confident, the consumer will not be willing to pull out the big bucks. Confidence impacts consumer spending, which affects economic growth. As for its stock market impact, strong economic growth translates to healthy corporate profits and higher stock prices.

So far, holiday spending has been strong, which bodes well for the strength of the consumer. In November alone, retail sales were up 5.8 percent year over year, and Mastercard SpendingPulse is projecting that we'll see the strongest holiday season sales growth since 2010, which should surpass 5 percent year-over-year growth.

The tax bill's impact

With the newly passed tax bill, we expect these consumer readings to come in strong. Here's a breakdown.

• University of Michigan consumer sentiment. Five hundred households are surveyed on their financial conditions and attitudes about the economy. The last reading was a bullish 98.5, but down from the October reading of 100.7, which is the highest since 2004. December's reading is expected to be 97.0.

• Consumer confidence. This index takes into account Americans' views of current economic conditions, and their expectations for the next six months. The most recent reading showed a 17-year high of 129.5.

Since consumer balance sheets have strengthened through deleveraging, we expect continued consumer strength, which bodes well for stock prices over the next six to 12 months.

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