Millennials have been stereotyped as avocado toast-loving lazy and entitled narcissists living off their parents. But according to one wealth manager, the spending power of Generation Y is what could be keeping bullish hopes for the stock market alive. Speaking to CNBC, Canaccord Genuity’s chief market strategist Tony Dwyer stated that millennials have entered a new phase in their lives where they are more financially empowered and thus contributing significantly with their purchasing power.
The strategist added that Generation Y has been in the workforce for years now. Consequently, millennials are beginning to spend like other generations ahead of them. This, according to Dwyer, could ‘help buffer the economy from a more significant slowdown’. While millennials are considered to have been the worst hit by the Great Recession, the strong jobs market has turned around the situation. And with millennials in a stage of life where they are starting families, this could serve as a boost to consumer discretionary stocks, per Dwyer:
“If a household is fully employed, they have income and they can go to the bank and get a home equity line of credit or credit card debt or whatever a bank is willing to lend them, you have some pretty consistent spending behavior as we’ve seen over the past 10 years.” The optimism surrounding millennials’ improving economic prospects is not restricted to Dwyer though. A Coldwell Banker report released last week revealed that besides the jobs boom, millennials are set to benefit from a wealth transfer from their baby boomer parents. In the next couple of decades, $68 trillion is expected to be passed down from baby boomers to millennials.