There’s a saying on Wall Street: Never bet against the American consumer. A rising stock market, strengthening home prices, and falling unemployment add up to a confident consumer in a mood to spend.

The “Black Friday” numbers are in. Investors are thrilled. But as OPEC gets ready to meet Thursday, concerns grow that the cartel’s production cut is in jeopardy.

West Texas Intermediate fell on Monday by $1.03 to close at $57.92 per barrel. Brent North Sea crude fell 11 cents to close at $63.36/bbl. The declines in crude undercut the morning rally.

But for retail investors, it’s beginning to look a lot like Christmas.

Black Friday and Thanksgiving online sales in the U.S. soared to record highs. Shoppers bought more than ever before on mobile devices. It was a hopeful start to the crucial holiday season.

U.S. retailers generated a record $7.9 billion in online sales on Black Friday and Thanksgiving. That’s an increase of 17.9% from a year ago, according to Adobe Analytics.

Internet marketer Criteo (NSDQ: CRTO) reported that 40% of Black Friday online purchases were made on smartphones, versus 29% last year. Early estimates for bricks-and-mortar stores show that foot traffic decreased less than 1% compared to last year.

Traditional retailers played it smart. Ahead of the holiday, they preempted declines at physical locations by beefing up their websites. They improved delivery and made it easier to return merchandise.

Cyber Monday: in the bag…

Today is “Cyber Monday.” Adobe Analytics expects to see $6.6 billion in Internet sales when the books on Monday are closed. That would make Cyber Monday the biggest online shopping day in U.S. history.

Why does all of this matter to Wall Street? Consumer spending accounts for two-thirds of the U.S. economy. Two-thirds of consumer spending occurs between Thanksgiving and the end of the year. Do the math.

Traders returned to work Monday with bullish sentiment over consumer spending. Retail stocks were among the biggest gainers. Most major store brands enjoyed a spike in share prices. E-commerce players led the way.

The biggest losers were energy stocks and chipmakers. The latter were hurt by analyst downgrades. Energy took a tumble as the global crude glut showed signs of worsening. OPEC’s disarray doesn’t help.

The Senate is back from recess and at work on tax reform. President Trump meets with Senators on Tuesday. The GOP can’t afford many defections; passage of the bill is far from certain. The legislation has come under criticism for raising taxes on the middle class. Sacred cows would get gored.

The possible failure of tax cuts is one of the few clouds on the horizon. However, traders have priced in that risk. Wall Street has come to expect less and less from Washington.

Economic indicators are strong. Retail sales are soaring. Demand for homes is rising, but inventory is limited. That pushes up home prices, which boosts the psychological “wealth effect.” The United States has become the global growth engine.

These tailwinds for stocks should persist without fiscal stimulus. Sure, stocks are overvalued. But for now, worries about a correction are out the window.

The stock market drops when consumers get stingy. The converse is true. That’s why investors are looking forward to a year-end pop in stocks.

So, yes Virginia, you can believe in a Santa Claus rally. Let’s do the numbers.

Monday Market Wrap

• DJIA: +0.10% or +22.79 points to close at 23,580.78
  
• S&P 500: -0.04% or -1.00 point to close at 2,601.42
  
• Nasdaq: -0.15% or -10.64 points to close at 6,878.52
  

Monday’s Big Gainers

• Teva Pharmaceutical (NYSE: TEVA) +7.45%

Generic drug maker launches management shake-up.

• Signet Jewelers (NYSE: SIG) +5.12%

Bargain hunters scoop up battered retailer.

• L Brands (NYSE: LB) +4.11%

Retailer jumps on strong Q3 and Black Friday momentum.

Monday’s Big Losers

• Western Digital (NSDQ: WDC) -6.71%

Analysts downgrade Taiwan Semiconductor Manufacturing (NYSE: TSM); sector falls.

• Micron Technology (NSDQ: MU) -3.28%

TSM woes weigh on MU.

• Kimco Realty (NYSE: KIM) -3.24%

Shopping center REITS out of favor as e-commerce dominates.

Letters to the Editor

 “Whatever happened to the expected boom in infrastructure?” — Kevin D.

Trump’s agenda faces obstacles. Even the GOP-controlled Congress isn’t going along with his promised infrastructure spree.

Here’s what the media aren’t telling you: Trump’s proposed program isn’t designed to directly fund construction. Federal money won’t go to roads, bridges, water systems, and airports. It’s a privatization plan. That means tax breaks for construction companies.

Republican deficit hawks are resisting Trump’s infrastructure plan. They’re insisting on cuts in other programs to offset the tax breaks. Many construction stocks once considered beneficiaries of greater spending are starting to fade. So if you think infrastructure plays are “Trump stocks,” think again.

“I’ve read and heard a lot lately about the IMF trying to replace the U.S. dollar with Special Drawing Rights (SDRs) as the new world reserve currency. If this ever happens, nations will no longer need to hold dollars, and our currency will be greatly devalued, causing, among other things, big problems in the financial markets. I would appreciate your thoughts on this subject.” — Alan B.

Alan, thanks for your question. SDRs are an international monetary reserve currency created by the IMF in 1969. They supplement reserves of member countries. They address concerns about the limitations of gold and dollars as the sole means of settling international accounts. But their simple role has not prevented conspiracy theories from spreading on the Internet.

I wouldn’t worry about it. Fears about SDRs are stoked by the folks who wear tin foil hats. And they’re often trying to sell you something.

Quote of the Day

“If they can get you asking the wrong questions, they don’t have to worry about answers.” — American novelist Thomas Pynchon

Keep your feedback coming! My job is to separate fact from fiction. And to help make you money. Got a question? Reach me at: mailbag@investingdaily.com

John Persinos is managing editor of Personal Finance and chief investment strategist of Breakthrough Tech Profits.