With high inflation, the Fed’s interest rate increases, and recessionary pressures, the University of Michigan’s consumer sentiment index hit near rock bottom with a 59.1 reading in May, down 9.4% from April. Furthermore, following the U.S. economy’s marginal GDP growth contraction in the last quarter, the performance of consumer cyclical stocks, which are highly dependent on the business cycle, has been negatively affected. However, certain financially robust consumer cyclical stocks could be worth betting on.
Furthermore, in April U.S. consumer spending rose more than expected despite widespread recessionary fears and slashed growth estimates. Also, the current job market is piping hot, which could generate sufficient consumer spending in the coming months, boosting the consumer cyclical industry.
