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By definition, retail stocks are one of the most direct beneficiaries of higher consumer spending.
Readings above 100 indicate that consumers are more likely to spend instead of saving.
The jump to 108.7 marked thestrongest monthly gainsince March 2021, with all five components of the index improving.
The Consumer Confidence Index is a leading indicator, meaning its a predictive measurement.
Rather than measuring what consumers have already done in the past, it instead forecasts upcoming behavior.
In September 2024,retail sales figuresalso picked up, rising 0.4%.
This is another indication to experts that retail stocks might benefit in the coming months.
That would push holiday spending to record levels and bode well for retail stocks.
The resulting rabid following for the company continues to propel its stock to new highs.
The company has also updated its pricing, its look and its products ahead of this years holiday season.
The company has topped expectations for the past 19 quarters in a row.
Caveats To Consider
On the one hand, the environment seems ripe for investing in retail stocks.
With both consumer confidence andactual retail salesrising, retail stocks do appear to have a tailwind.
However, there are numerous other factors that could make investing in retail stocks anything but a slam dunk.
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