The consumer discretionary sector of the economy consists of businesses that sell non-essential goods and services. This includes items that people purchase when they have extra money such as traveling, buying a new car, or dining out. Companies in this field are highly affected by the general state of the economy. When the economy is doing well, people tend to have more money for discretionary items, leading to higher profits for these companies. Conversely, during an economic downturn, spending on such items usually decreases.
Consumer discretionary stocks can offer substantial returns, since these companies typically do extremely well during periods of economic prosperity. However, they also carry a higher risk since their performance closely follows economic cycles. If you’re an investor who is comfortable with risk and is betting on a strong economy, consumer discretionary stocks might be a suitable option for you. Now, let’s take a closer look at three well-known consumer discretionary stocks to watch in the stock market this month.
Consumer Discretionary Stocks To Buy [Or Avoid] Now
Amazon (AMZN) is a leading American multinational company focused on e-commerce, cloud computing, digital streaming, and artificial intelligence. It is the world’s largest online marketplace and a significant player in the consumer discretionary sector due to the wide variety of products it offers, ranging from books and electronics to clothing and food.
On May 17, 2023, Amazon introduced four new products to its Echo lineup: the Echo Pop, Echo Show 5, Echo Show 5 Kids, and Echo Buds. This occurred as sales of Alexa-enabled devices hit half a billion. These products include a compact smart speaker (Echo Pop), an upgraded device with a screen (Echo Show 5), a kids’ version of Echo Show 5 (Echo Show 5 Kids), and wireless earbuds offering hands-free Alexa access (Echo Buds). At present, shares of Amazon stock have been trending higher over the past six months, up by 43.13%. As of Tuesday’s close, Amazon stock ended the day at $126.61 per share.
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Nike Inc. (NKE Stock)
Nike Inc. (NKE) is a global leader in the design, development, and marketing of athletic apparel and equipment. The company’s innovative products and strong brand make it a top choice for consumers and investors in the consumer discretionary sector. Nike’s performance is often tied to the health of the global economy and consumer spending trends.
This month, Nike, Inc. (NKE) announced that it will release its financial results for the fourth quarter of fiscal 2023 on Thursday, June 29, 2023, after regular stock market trading hours. The company also plans to hold a conference call, led by its management, at 2:00 p.m. PT on the same day to discuss these results. Though over the last six months, shares of Nike’s stock have been modestly trading lower, down 1.98%, to wrap up Tuesday’s trading day, shares of NKE stock closed at $106.19 per share, up 0.94%.
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Home Depot (HD Stock)
Home Depot Inc. (HD) is the largest home improvement retailer in the United States, supplying tools, construction products, and services. Their sales often rise when the economy is strong and homeowners are investing in their properties.
Last month, The Home Depot declared a cash dividend of $2.09 per share for the first quarter, which was approved by their board of directors. The dividend will be distributed on June 15, 2023. This marks the 145th consecutive quarter that the company has distributed a cash dividend. Over the last six months, shares of HD stock have decreased by 7.54%. Nonetheless, to finish Tuesday’s trading session, Home Depot stock closed up 0.99% at $296.00 per share.
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