The prospect for higher consumer spending this spring thanks to tax reform is more important to retailers than continued destruction by Amazon (AMZN) .
Or such is the message from retail stocks right now.
The S&P Retail Index is up a cool 13.5% this year, making it the best-performing sector of the S&P 500. The performance of retail stocks have blown away the number two performer, semiconductor and semiconductor equipment, which has notched a 7.8% gain.
Surging retail stocks is surprising for several reasons beyond the threat of Action Alerts Plus holding Amazon.
First, the retail sector has been absent bullish takeover news as seen in the semiconductor space (see Microsemi (MSCC) deal, ongoing battle between Qualcomm (QCOM) and Action Alerts Plus holding Broadcom (AVGO) ). The only thing that qualifies as a retail deal this year is supermarket chain Albertson's buying up the dying carcass that is Rite-Aid (RAD) . That doesn't qualify as exciting in the same vein as Amazon buying Whole Foods last year.
Time to fade this rally...