The Retail Sector Makes a Strong Comeback
June 18, 2015
In a stock market with many ups and downs these past few months, it comes as a relief to see how positively the retail sector has responded recently. Retail sales slumped in the early part of 2015 and investors were beginning to worry that despite having extra money in their pocket from lower gas prices, Americans weren’t spending more. All of this seems to be turning around though because even this week strong consumer spending gains were reported giving investors good news; retail sales grew to $393 billion last month.
While retail stocks usually do best at the beginning of a recovery, the recent plunge in oil prices created a second retail opportunity even as the economic cycle has been slowing. Lower gas prices at the pump allows consumers to have more money in their pockets to spend on retail. We increased our holdings in retail stocks this past fall after oil prices first started their decline. After a dim winter, the most recent economic report on retail sales shows that consumers really are spending those extra pennies and this is why the retail sector has emerged as one of the positively performing stock sectors in 2015.