5 Stocks To Gain From Surge In Consumer Sentiment

The Consumer sentiment index release by the University of Michigan showed an upward trend. With the holiday season knocking on the door, a rise in consumer sentiment suggests that consumers are expected to spend more and eventually boost retail sales.

Better-Than-Expected Consumer Sentiment

On Nov 22, the University of Michigan reported a better-than-expected upward revision in U.S. consumer sentiment in November. The index read 96.8, which is above October’s final reading of 95.5.

In fact, the index of consumer expectations for November saw an upward revision of 87.3 from 85.9. October’s figure for the index was reported at 84.2. Richard Curtin, Surveys of Consumers chief economist, said that the level of optimism is quite high and “second only to the period from January 1998 to December 2000.”

Curtin is also certain that consumer spending will remain high due to steady wage growth and a 50-year low unemployment rate. Moreover, majority consumers expect the economy to expand uninterrupted as unemployment and lower interest rates will help inflation.

Holiday Season Around the Corner

Thanks to Thanksgiving, the last week of November seems to be quite happening for the retail space as U.S. consumers gear up for holiday season sales. In fact, this year, the National Retail Federation estimates sales to grow 4%.

The holiday season kick starts on Black Friday, the day after Thanksgiving and this would definitely give a glimpse of consumer’s spending trend this year. Per a JP Morgan analyst report, sales are expected to increase by 4.9% during this holiday season. Holiday sales in 2018 had gained only 1.9% as a major sell-off in the stock market had weighed on shoppers.

5 Retail Stocks to Buy Now

Improvement in consumer sentiment has helped the economy remain buoyant. Given the positive developments, we are sure that this holiday season will see a rally in retail stocks. Here are five retail stocks that flaunt a Zacks Rank #1 (Strong Buy).

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