What does the 0.5% rise in retail sales mean for investors?

A 0.5% increase in retail sales shows that consumers are still spending money despite economic concerns. This is positive for companies that sell goods directly to consumers, especially in sectors like automotive and home furnishings that drove this growth. It suggests these businesses may see increased revenue and potentially higher stock prices.

What are consumer discretionary stocks?

Consumer discretionary stocks are companies that sell non-essential goods and services that people buy when they have extra money. This includes things like cars, furniture, restaurants, and entertainment. These stocks tend to do well when the economy is strong and consumers feel confident about spending, but can struggle during economic downturns.

Why are motor vehicle and furniture sales important indicators?

Motor vehicles and furniture are big-ticket purchases that people typically delay when they're worried about money. When sales in these categories increase, it shows consumers are confident enough to make major spending decisions. This confidence often translates to broader economic strength and can benefit many related businesses.

How might Federal Reserve policy affect these stocks?

The Federal Reserve uses interest rates to manage the economy. When rates are low, it's cheaper for consumers to borrow money for big purchases like cars and furniture, which helps these companies. When the Fed raises rates, borrowing becomes more expensive and consumers may spend less, potentially hurting these stocks.

What does 'cyclical sectors' mean?

Cyclical sectors are industries that tend to rise and fall with the overall economy. When times are good, these companies do well because people spend more on their products. When the economy struggles, these same companies often see their sales and stock prices decline. Retail and automotive are classic examples of cyclical sectors.

18 handpicked stocks

Consumer Strength: The Retail Rebound

A surprising surge in U.S. retail sales, driven by strong automotive and home furnishing purchases, signals continued consumer strength despite economic headwinds. This theme focuses on retailers and manufacturers in these key discretionary sectors that are benefiting from the robust consumer demand.

Han Tan | Market Analyst

Published on August 18

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

Home Depot, Inc., The

Current price

$394.84

Lowe's Companies Inc.

LOW

Current price

$247.91

Restoration Hardware Holdings, Inc.

Current price

$200.80

Wayfair Inc.

Current price

$87.69

Whirlpool Corp.

WHR

Current price

$79.01

Leggett & Platt, Incorporated

LEG

Current price

$9.01

Join Nemo FREE today and unlock every stock

It only takes 60 seconds.

12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

≈

In 12 months it might be worth:

$1,000.00

+24.55%

≈

About This Group of Stocks

Our Expert Thinking

The unexpected 0.5% rise in U.S. retail sales signals consumer resilience despite economic headwinds. This group captures companies positioned to benefit from strong spending in motor vehicles and home furnishings, the key drivers of recent growth. Our analysts see this as evidence that American consumers remain confident and willing to spend on discretionary items.

What You Need to Know

This collection focuses on the consumer discretionary value chain, spanning from manufacturers to retailers. The companies operate in cyclical sectors that can be sensitive to economic changes, but current data suggests robust demand. These stocks may benefit from continued consumer strength, though they could face headwinds if spending patterns shift.

Why These Stocks

Each company was handpicked for its direct exposure to the automotive and home furnishing industries that drove July's retail surge. Professional analysts selected these stocks based on their positioning within the consumer discretionary supply chain, from manufacturing to retail operations, ensuring comprehensive coverage of this spending trend.

Group Performance Snapshot

24.62%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 24.62% over the next year.

12 of 18

Stocks Rated Buy by Analysts

12 of 18 assets in this group are rated Buy by professional analysts.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

🚗

Motor Vehicle Momentum

Car sales jumped 1.6% in July, showing consumers are still making big-ticket purchases. This signals confidence in the economy and creates opportunities for automotive retailers and manufacturers.

🏠

Home Furnishing Surge

Furniture sales rose 1.4%, indicating people are investing in their homes despite economic uncertainty. This trend benefits retailers and manufacturers in the home goods space.

💪

Consumer Resilience

Despite inflation concerns, Americans are still spending on discretionary items. This unexpected strength could drive continued growth for companies in this retail rebound theme.

Get the full story on this Basket. Read our detailed article on its risks and potential.

Read Full Insight

Why Invest with Nemo Money?

🆓

Zero Commission

Trade stocks, ETFs, and more with zero commission. Keep more of your returns.

🔒

Trusted & Regulated

Part of Exinity Group 2015, serving over a million customers globally.

💰

6% Interest on Cash

Earn 6% AER on uninvested cash with daily interest payments.

Discover More Opportunities

Government Shutdown Impact: Defensive Stocks Explained

A U.S. government shutdown has been triggered by a congressional budget impasse, creating economic uncertainty. This theme focuses on companies in defensive sectors that may prove resilient to the resulting market volatility and disruptions in federal spending.

Zillow Redfin Competitors | Market Disruption

The Federal Trade Commission is suing Zillow and Redfin, alleging their rental listing deal violates antitrust laws. This legal challenge could disrupt the online real estate market, creating opportunities for competing platforms to capture market share.

Chemical Sector: Berkshire's $10B Acquisition Impact

Berkshire Hathaway's potential $10 billion acquisition of Occidental's OxyChem unit signals a major investment in the industrial chemical sector. This move could create ripple effects, presenting opportunities for other chemical manufacturers who stand to gain from shifts in the market.

Frequently Asked Questions

Everything you need to know about the product and billing.