Canadian stock investors seek growth in U.S. consumer comeback

Thu Nov 29, 2012 11:58am EST
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* U.S. housing recovery seen spurring consumer spending

* Staples like autos, appliances to benefit alongside discretionary

* Too hard to call winners in the tech sector

By Andrea Hopkins

TORONTO, Nov 29 (Reuters) - While fear of the U.S. fiscal cliff promises to hold financial markets hostage at least to year-end, a surge in Black Friday shopping and a recovery in the U.S. housing market has Canadian investors looking to a few consumer-fed stocks for potential growth.

The retreat of the U.S. consumer during the Great Recession left shares of retailers, luxury goods producers, auto and appliance makers, home builders and others reeling on both sides of the border. But signs of improving confidence among shoppers could encourage a play on consumer spending, and Canadian strategists see an array of opportunities.

The No. 1 reason the U.S. consumer recovery has lagged the end of the recession is residential real estate, says Noah Blackstein, portfolio manager at Scotiabank's Dynamic Funds.

With housing starts and sales hitting bottom and beginning to pick up in the United States, and at still-high levels in Canada, the tide has begun to turn.

"Real estate really matters to a lot of consumers. As residential real estate recovers, Americans are more confident in the value of their assets. And they're also seeing the labor numbers improving as the housing market has a whole multiplier effect," said Blackstein.   Continued...