Consumer spending accounts for two-thirds of economic spending. With pockets full of stimulus savings and abundant employment opportunities, the consumer has been merrily shopping despite the pandemic, supply chain snarls and surging inflation. In October, retail sales jumped 16.3% over the past year to $638 billion. Spending remains brisk with debit and credit card outlays up 27% on a two year basis.

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Mastercard (MC) reported third quarter revenues rose 30% to $5 billion with net income charging 59% higher to $2.4 billion. This strong performance was driven by healthy domestic spending and solid growth in cross-border spending which has recently returned to pre-pandemic levels as borders have reopened for travel.

Likewise, Visa (V) reported fourth quarter revenues increased 29% to $6.6 billion with net income ringing up a 68% gain to $3.6 billion. Wayne Best, Visa’s Chief Economist, said, “With new U.S. COVID case counts declining and consumer confidence rebounding, we expect a solid pace of consumer spending and economic growth through the end of the year.”

High-quality retailers like The TJX Companies (TJX) and Ross Stores (ROST) both reported 14% comparable store sales growth in the latest quarter thanks to robust sales trends throughout the quarter. The Grinch reportedly is hoarding inventories as he lurks in the bowels of bumper-to-bumper boats waiting to be unloaded. However, TJX is having no problems keeping its store shelves stocked with goodies. TJX expects a happy holiday season especially with the “phenomenal” performance from its HomeGoods stores.

Consumers are not the only ones shopping for deals. During the past quarter, several high-quality companies announced spending plans of their own as corporate coffers overflow with copious cash. Baxter International (BAX) announced plans to acquire Hill-Rom (HRC), a global medical technology leader, in a $12.4 billion deal which is expected to generate “compelling” financial returns for Baxter’s shareholders. Booking Holdings (BKNG) announced a $1.2 billion deal to acquire Getaroom, a distributor of hotel rooms, which it will roll into its Priceline brand. T. Rowe Price (TROW) announced a $4.2 billion deal to acquire Oak Hill Advisors, a leading alternative credit manager with $53 billion in capital under management.

Other companies shopping for bargains find the best deal around is an investment in their own business done through substantial share repurchase programs. Berkshire Hathaway’s (BRK-B) free cash flow increased 14% during the first nine months of the year to $22.4 billion with a jolly Warren Buffett scooping up $20.2 billion of Berkshire’s shares at a bargain price.

Building its A-B-C blocks, Alphabet’s (GOOGL) free cash flow year-to-date increased a whopping 89% to $48.5 billion with the company buying $36.8 billion of its stock. Apple (appl) closed out a fruitful fiscal year by repurchasing a juicy $86 billion of its shares with rumors that an Apple autonomous car might soon join the holiday wish list.

While Canadian National Railway (CNI) did not get the train set it wanted, the Kansas City Southern (KSU) merger termination fee helped CNI announce a new C$5 billion share buyback program for next year. Facebook (FB) plans to play in the metaverse this holiday season with a name change to Meta Platforms while announcing a new $50 billion share buyback program.

Microsoft (MSFT) is stuffing stockings with an 11% dividend increase with plans to repurchase $60 billion of its stock. Roche received an early holiday present when Novartis (NVS) agreed to return 53.3 million shares it held for $20.7 billion.

The biggest shopaholic of the year is Mr. Market who has energetically been bidding up stocks to record highs. We all know that Mr. Market will shop ‘til he drops! While we don’t know when that day will arrive, no worries. We agree with Mr. Buffett who said, “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”

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