As consumers, we can all possibly tell stories of how the pandemic has affected our lives — including confidence in the economy, spending habits, and life choices since March. The current news headlines on the second wave of the novel coronavirus outbreak worldwide are likely to affect consumer sentiment and spending this fall and winter. Therefore, let’s look at seven consumer stocks for an impenetrable defense even if moods ebb and flow.
How do consumers feel about the state of the economy and its future? In addition to anecdotal evidence and news headlines, economists conduct regular surveys and construct indices that may help gauge the sentiment. For example, the Organisation for Economic Co-operation and Development (OECD) — which has 37 member countries including the U.S. and other developed economies — publishes a “Consumer confidence index (CCI),” whose long-term average is 100. In May, it fell to a multi-year low of 97.67. And the reading for September stands at 98.51.
Moreover, in the U.S., the University of Michigan’s Consumer Confidence Index and the Conference Board Consumer Confidence Index are measures of public confidence. That said, recent results from both indices also show similar readings. So, although consumers are feeling better compared to earlier in the year, the sentiment is still subdued.
Typically, how the Main Street feels affects what happens on Wall Street. For example, the S&P 500 bottomed out on March 23, having decreased close to 35% from its level on Feb 19. Since then, broader markets and shares of many companies have risen sharply. In fact, a large number of stocks hit new highs by early September. The S&P 500 index also saw an all-time high on Sept. 2. But, the indices have been consolidating since.
Yet, it is hard to know how broader markets mare fare in the