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4 Solid Stocks to Buy on Rise in Personal Income, Spending
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The Federal Reserve’s monetary tightening campaign has resulted in a steep decline in inflation. The central bank has been struggling to bring down inflation for a long time as, despite steep rate hikes, a resilient labor market and steady rise in personal income and spending posed major challenges.
However, inflation has declined sharply over the past several months despite the rise in personal income and spending, which is good for the broader economy. The Commerce Department said on Dec 22 that personal income rose 0.4% in November on a month-over-month basis.
Personal spending also increased 0.2% month over month in November. The growth was driven by a decline in inflation.
The Federal Reserve’s favorite inflation gauge, the personal consumption expenditures (PCE) price index, fell 0.1% in November, the first decline in the index since April 2022. Year over year, PCE inflation declined to 2.6% in November from the prior month’s increase of 2.9%.
Core PCE, which strips out the volatile food and energy costs, increased a meager 0.1% in November, while the annual increase was 3.2%.
Although personal income has been steadily growing, consumers spent cautiously over the past year on fears of the economy slipping into a recession. However, easing inflation is giving consumers the confidence to spend lavishly now.
Also, the U.S. economy has been growing impressively despite inflationary pressures. The U.S. economy grew a solid 4.9% in the third quarter.
Cooling inflation saw the Fed leaving interest rates unchanged in its last three FOMC meetings after increasing rates by 525 basis points since March 2022. The Federal Reserve has also indicated multiple rate cuts in 2024. Market participants are now expecting at least three 25-basis-point rate cuts in 2024.
Lower borrowing costs are likely to give consumers more confidence and allow them to spend more freely. Given this favorable environment, investing in consumer discretionary stocks seems to be a wise idea.
Our Choices
We have narrowed our search to five consumer discretionary stocks that have strong potential for 2024. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of our picks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Snap-on Incorporated (SNA - Free Report) is a global provider of professional tools, equipment and related solutions for technicians, vehicle service centers, original equipment manufacturers and other industrial users. SNA’s products include a broad range of professional hand and power tools; vehicle diagnostics and service equipment; business management systems; and other tool and equipment solutions.
Snap-on’s expected earnings growth rate for next year is 4.4%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 60 days. SNA currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Rocky Brands, Inc. (RCKY - Free Report) is a leading designer, manufacturer and marketer of premium quality footwear and apparel. RCKY markets its products under a portfolio of well-recognized brand names, including Rocky Outdoor Gear, Georgia Boot, Durango, Lehigh and the licensed brand, Dickies.
Rocky Brands’ expected earnings growth rate for next year is 46.6%. The Zacks Consensus Estimate for current-year earnings has improved 132% over the past 60 days. RCKY presently sports a Zacks Rank #1.
Royal Caribbean Cruises Ltd. (RCL - Free Report) owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. Additionally, RCL has a 50% investment in a joint venture with TUI AG, which operates the brand TUI Cruises. Royal Caribbean Cruises' brands primarily serve the contemporary, premium and deluxe segments of the cruise vacation industry, which also includes the budget and luxury segments.
Royal Caribbean Cruises' expected earnings growth rate for next year is 38.1%. The Zacks Consensus Estimate for current-year earnings has improved 4.9% over the past 60 days. RCL currently sports a Zacks Rank #1.
Live Nation Entertainment, Inc. (LYV - Free Report) operates as a live entertainment company. LYV operates through the Concerts, Ticketing, and Sponsorship and Advertising segments. Live Nation Entertainment has more than 580 million fans across all of its concerts and ticketing platforms in 46 countries.
Live Nation Entertainment’s expected earnings growth rate for next year is 61.1%. The Zacks Consensus Estimate for current-year earnings has improved 46.1% over the past 60 days. LYV presently has a Zacks Rank #2.
Hilton Worldwide Holdings Inc. (HLT - Free Report) is a hospitality company that owns, leases, manages, develops, and franchises hotels and resorts. As of Dec 31, 2022, HLT’s development pipeline comprised nearly 2,820 hotels, with nearly 416,400 rooms across 118 countries and territories — including 30 countries and territories where it currently has no running hotels.
Hilton Worldwide’s expected earnings growth rate for next year is 14.8%. The Zacks Consensus Estimate for the current-year earnings has improved 0.3% over the past 60 days. HLT presently carries a Zacks Rank #2.
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4 Solid Stocks to Buy on Rise in Personal Income, Spending
The Federal Reserve’s monetary tightening campaign has resulted in a steep decline in inflation. The central bank has been struggling to bring down inflation for a long time as, despite steep rate hikes, a resilient labor market and steady rise in personal income and spending posed major challenges.
However, inflation has declined sharply over the past several months despite the rise in personal income and spending, which is good for the broader economy. The Commerce Department said on Dec 22 that personal income rose 0.4% in November on a month-over-month basis.
Personal spending also increased 0.2% month over month in November. The growth was driven by a decline in inflation.
The Federal Reserve’s favorite inflation gauge, the personal consumption expenditures (PCE) price index, fell 0.1% in November, the first decline in the index since April 2022. Year over year, PCE inflation declined to 2.6% in November from the prior month’s increase of 2.9%.
Core PCE, which strips out the volatile food and energy costs, increased a meager 0.1% in November, while the annual increase was 3.2%.
Although personal income has been steadily growing, consumers spent cautiously over the past year on fears of the economy slipping into a recession. However, easing inflation is giving consumers the confidence to spend lavishly now.
Also, the U.S. economy has been growing impressively despite inflationary pressures. The U.S. economy grew a solid 4.9% in the third quarter.
Cooling inflation saw the Fed leaving interest rates unchanged in its last three FOMC meetings after increasing rates by 525 basis points since March 2022. The Federal Reserve has also indicated multiple rate cuts in 2024. Market participants are now expecting at least three 25-basis-point rate cuts in 2024.
Lower borrowing costs are likely to give consumers more confidence and allow them to spend more freely. Given this favorable environment, investing in consumer discretionary stocks seems to be a wise idea.
Our Choices
We have narrowed our search to five consumer discretionary stocks that have strong potential for 2024. These stocks have seen positive earnings estimate revisions in the last 60 days. Each of our picks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy).
Snap-on Incorporated (SNA - Free Report) is a global provider of professional tools, equipment and related solutions for technicians, vehicle service centers, original equipment manufacturers and other industrial users. SNA’s products include a broad range of professional hand and power tools; vehicle diagnostics and service equipment; business management systems; and other tool and equipment solutions.
Snap-on’s expected earnings growth rate for next year is 4.4%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 60 days. SNA currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Rocky Brands, Inc. (RCKY - Free Report) is a leading designer, manufacturer and marketer of premium quality footwear and apparel. RCKY markets its products under a portfolio of well-recognized brand names, including Rocky Outdoor Gear, Georgia Boot, Durango, Lehigh and the licensed brand, Dickies.
Rocky Brands’ expected earnings growth rate for next year is 46.6%. The Zacks Consensus Estimate for current-year earnings has improved 132% over the past 60 days. RCKY presently sports a Zacks Rank #1.
Royal Caribbean Cruises Ltd. (RCL - Free Report) owns and operates three global brands — Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises. Additionally, RCL has a 50% investment in a joint venture with TUI AG, which operates the brand TUI Cruises. Royal Caribbean Cruises' brands primarily serve the contemporary, premium and deluxe segments of the cruise vacation industry, which also includes the budget and luxury segments.
Royal Caribbean Cruises' expected earnings growth rate for next year is 38.1%. The Zacks Consensus Estimate for current-year earnings has improved 4.9% over the past 60 days. RCL currently sports a Zacks Rank #1.
Live Nation Entertainment, Inc. (LYV - Free Report) operates as a live entertainment company. LYV operates through the Concerts, Ticketing, and Sponsorship and Advertising segments. Live Nation Entertainment has more than 580 million fans across all of its concerts and ticketing platforms in 46 countries.
Live Nation Entertainment’s expected earnings growth rate for next year is 61.1%. The Zacks Consensus Estimate for current-year earnings has improved 46.1% over the past 60 days. LYV presently has a Zacks Rank #2.
Hilton Worldwide Holdings Inc. (HLT - Free Report) is a hospitality company that owns, leases, manages, develops, and franchises hotels and resorts. As of Dec 31, 2022, HLT’s development pipeline comprised nearly 2,820 hotels, with nearly 416,400 rooms across 118 countries and territories — including 30 countries and territories where it currently has no running hotels.
Hilton Worldwide’s expected earnings growth rate for next year is 14.8%. The Zacks Consensus Estimate for the current-year earnings has improved 0.3% over the past 60 days. HLT presently carries a Zacks Rank #2.