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5 Top Stocks to Buy as Consumer Confidence Stays High

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The delta variant of coronavirus was expected to impact consumer confidence this month. After all, many feared that the outbreak will eventually lead the government to impose shutdown measures again that could disrupt economic growth and hit corporate profits.

However, thankfully that wasn’t the case with consumers staying confident on development in the pace of vaccination and an array of stimulus measures by the government.

In fact, there is huge pent-up demand among customers that could help the economy chug along in the near future. At the same time, the Biden administration has already taken adequate steps to counter the delta variant strain by introducing new guidelines on wearing masks and other similar restrictions.

Americans’ confidence in the U.S. economy, incidentally, has jumped to pre-COVID heights. After all, the Conference Board’s consumer confidence index increased to 129.1 in July from June’s revised figure of 128.9, as mentioned in a MarketWatch article. The consumer confidence index now stands at the highest level since February 2020, a month before the start of the coronavirus pandemic.

To top it, consumers’ assessment about present business conditions improved this month. The Conference Board’s present situation index increased from 159.6 in June to 160.3 in July as more people turned confident about labor market conditions and worries about inflation have somewhat ebbed, citing the MarketWatch article.

Quoting a nytimes article, an encouraging 850,000 jobs were added in the month of June in the United States, per the Labor Department. Moreover, the Congressional Budget Office expects all jobs lost due to the pandemic to be recovered by the middle of 2022. Meanwhile, the Fed soothed concerns over the increase in inflation. According to Fed Chair Jerome Powell, the rise in prices of essential goods and commodities is transitory (read more: 5 Top Growth Stocks to Buy as Fed Soothes Inflation Fears).

It’s also worth mentioning that Americans’ assessment about future economic conditions, at least for the next six-month period, or the so-called expectations index remained more or less unchanged at 108.4 in July, citing the MarketWatch article. No doubt, that’s another strong number.

Lastly, the Conference Board’s senior director of economic indicators, Lynn Franco, summed up by saying that “the proportion of consumers planning to purchase homes, automobiles, and major appliances all rose—a sign that consumer spending will continue to support economic growth in the short-term,” as mentioned in a bloombergquint article.

This is because the more confident consumers are about their financial situation, the more will they spend on big-ticket and other discretionary items. We have, thus, highlighted five consumer discretionary stocks that are most likely to gain from solid consumer confidence.

These stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bassett Furniture Industries, Incorporated (BSET - Free Report) is a leading manufacturer and marketer of high quality, mid-priced home furnishings. The company currently has a Zacks Rank #1 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has moved up 19.2% over the past 60 days. The company’s expected earnings growth rate for the current year is 339.6%.

Boyd Gaming Corporation (BYD - Free Report) is a multi-jurisdictional gaming company. The company currently has a Zacks Rank #1 and a VGM Score of B. The Zacks Consensus Estimate for its current-year earnings has risen 2.8% over the past 60 days. The company’s expected earnings growth rate for the current year is a whopping 2,326.67%.

Culp, Inc. (CULP - Free Report) manufactures, sources, markets, and sells mattress fabrics and upholstery fabrics. The company currently has a Zacks Rank #2 and a VGM Score of A. The Zacks Consensus Estimate for its current-year earnings has climbed 11.9% over the past 60 days. The company’s expected earnings growth rate for the current year is 27.1%.

Whirlpool Corporation (WHR - Free Report) is one of the largest manufacturers of home appliances in the world. The company currently has a Zacks Rank #2 and a VGM Score of A. The Zacks Consensus Estimate for its current-year earnings has moved up 9.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 41.5%.

Ford Motor Company (F - Free Report) designs, manufactures, markets and services cars, trucks, sport utility vehicles, electrified vehicles, and Lincoln luxury vehicles. The company currently has a Zacks Rank #1 and a VGM Score of A. The Zacks Consensus Estimate for its current-year earnings has advanced 27.8% over the past 60 days. The company’s expected earnings growth rate for the current year is 202.4%.