Consumer Discretionary Stocks May Be Making Headway as the U.S. Reopens for Business
Many of the stocks within the consumer discretionary sector have been hit hard by the quarantine lockdowns put in place due to COVID-19. With retail spending subdued for several months now, it’s no wonder it has put a strain on growth.
Retailers, which make up most of the sector, are eager to see how revenue will play out but consumers may not resume their spending habits so easily, and so soon.
Many of the retailers will be reporting results in the coming week, such as American Eagle Outfitters, DICK’S Sporting Goods, Duluth Holdings, Express Inc, The Gap Inc, and Tiffany & Co.
Several financial analysts are taking a cautionary look at this sector as they look for steady ground on future revenue prospects for the sector.
The sector as a whole is down -20.17% year-to-date. A further recession for the remainder of the year would cause many companies to lose revenue to upwards of 40%.
With an upcoming U.S. jobs report expected to show an increase in unemployment towards 20% for May, investors are focusing on key players that have shown dominance during these difficult times such as Target, Walmart, and Amazon due to a supply of essential items as well as games and electronics that consumers can use during a lockdown period.
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