A Strong rally in the retail stocks as the consumer’s sentiment remains extremely positive.

retails

Wall Street is expecting to make a decent profit on the event of this holiday as the consumer will be rushing towards the retail shops with a fat wallet. The current consumer’s sentiment strongly suggest that there will be almost no bargains which will ultimately add lucrative income to the names of big companies in the world. In the last year retailers like Best Buy, Kohl’s Corp and Macy’s incurred huge loss in the financial market as fewer consumers headed towards their shop on the event of a drastic economic crisis. But things are totally upside down this year as improved economy strongly suggest that the large numbers of shoppers will be rushing towards the market for all the lucrative offers. Such a dramatic improvement in the U.S economy has pushed the S&P 500 to a record high in the stock market. According to the National Retail Federation the recent wage gains and higher employment rate in the U.S economy will directly increase the sales near bout 3.6% this year. In the last year, the Federation expected a 3.7% growth whereas the  real data was 3.2%.In the eyes of some leading investors, the effect of the increased number of shoppers has already affected the price of leading companies like Best Buy and Macy’s. In the last few weeks, the Macy’s share has jumped more than 20 percent whereas Kohl’s’ stock has risen for 25 percent which is the best performance by them within the last 16 years. Some leading economist believes that the relying only on the sales performance is not enough to gauge the strength of the company share rather the overall consumer sentiment is important in the longer time frame for better economic stability. Though the leading sales stores were expecting overwhelming consumers in their stores but the number of consumers was pretty low in the stores in this holiday shopping season.

According to Thomson Reuter’s data, the leading 15 Big Black Friday player have gained a total 12 percent return in this year. Among the big Black Friday players, famous companies like brick and mortar chains and online king amazon were holding the leading position in sales. This has caused a strong surge in the stock of Best Buys and Mercy’s. Macy’s stock has jumped 26 percent and Best Buy’s surged for 55 percent. Under new reign of U.S president Donald Trump, the market is anticipating for a tax cut which might dramatically increase the consumer’s income and as a result retail stores will be fuel up by the consumer’s crowd. Such an action from Donald Trump has caused a strong rally in the SPDR S&P. The biggest outperformer in the U.S economy for the year 2016 has been the funds since the election. Since the election, that fund has been a big outperformer, outpacing most other industry-tracking funds with a 12.2-percent gain. The wider S&P 500 is up just over 3 percent in the same period. This has caused a 3 percent rise in the wider S&P 500 index. The selling of sporting goods in the recent days has also increased to a great extent as the U.S consumer sentiment rises in the global economy. But the leading stores with a physical appearance like Macy’s, Nordstrom etc. has suffered an extensive loss in the financial market due to shifting of consumer sentiments towards the online stores like Amazon.com. These have caused a catastrophic disaster in the performance of large physical organizations and in order to survive this huge impact they are now developing their own online sales strategies to get their consumers back again in the market. The consumers spending will mostly likely remain strong on holidays which might increase the cumulated revenue of the leading companies like Mac’s and Kohl’s.

The overall sentiment of the U.S consumers is still strongly positive in the global and domestic market and leading investors are targeting the positive sentiment of the consumers to make a decent profit within a very short period of time. The FED is most likely going to hike their interest rate in the month of December which will also create a strong foundation for the U.S dollar. If the FED increase their interest rate in the month of the December then the global economic crisis will settle down to a great extent as the investors will have a clear data in their business deals. But such a dramatic improvement in the U.S economy might cause a drastic situation in the other countries. Research suggest that in order retain the current ongoing performance of the U.S economy the FED needs a hike in the next year. But an increase in the interest rate in the next year will be an extremely difficult task for the FED as they will require constant positive data .On the contrary, the country is going to face their new leader, Mr. Trump and they are totally unaware of his activities. Previously the investors were in extreme fear due to the anti-social mentality of the U.S president Donald Trump but things have settled down to a great extent as Mr. Trump appreciate foreign investors in his victory speech. Considering all the parameters the U.S dollar is going to have a strong rally in the upcoming days and the consumer’s sentiment will remain extremely positive as their average hourly income is rising constantly for the last couple of months. But this has created a narrow battle between the online industry and physical retail sellers as the consumers’ sentiment if preferring online shopping.