Shares of Johnson Outdoors (JOUT 17.60%) were surging after the outdoor recreation company posted a better-than-expected earnings report. Johnson, which is best known for making fishing equipment, boats, and watercraft under brand names like Old Town, Minn Kota, and Humminbird. Sales in fishing, which is by far the company's biggest category.
Shares of Netflix (NFLX 4.32%) like many of its streaming rivals, Netflix has seen its share price tumble over the last year as global inflation rates have crunched household budgets. But despite the challenges, the company has implemented some interesting strategies that could bear fruit.
Etsy's (ETSY -4.45%) business soared during the early days of the pandemic, however that is changing as inflation will encourage the Federal Reserve to continue raising interest rates. The Fed meets next week to decide on the next rate hike and is expected to increase interest rates. Etsy's business is dependent on consumers being willing to open their wallets and spend money on mainly non-essential items. More interest rate hikes could end up tipping the economy into a recession and ultimately hurt sales on Etsy's online marketplace.
Lululemon Athletica (LULU -13.68%) stock has declined this year as inflation, rising interest rates, and other macro headwinds drove the major indexes into a grueling bear market. Lululemon's leggings, shirts and jackets may have gotten too pricey especially as rivals such as Nike, Under Armour and Adidas are driving a lot of apparel creativity right now, often at cheaper prices.
WHAT ELSE HAPPENED?
Consumer discretionary stock prices tend to rise and fall with the overall economy. The COVID-19 pandemic created unprecedented challenges for many consumer discretionary companies. But, as the economy reopens, investors have a unique opportunity in the sector. More recently, rising interest rates have the potential to cool economic growth, presenting a challenge for consumer discretionary companies in today’s stock market.
Consumer discretionary businesses cover several different industries, but all rely on consumers spending money that they don't need to spend.
Consumer discretionary companies include the following types of businesses:
• Makers of furniture, appliances, housewares, and other home furnishings
• Consumer electronics manufacturers
• Apparel and luxury goods companies
• Retailers of various kinds, including department stores, home improvement retailers, electronics retailers, home furnishers, and clothing stores
• Direct-to-consumer retailers that sell goods by catalog, mail, or via e-commerce
• Hotel, resort, and casino operators
• Restaurant companies
• Cruise operators
GET IN ON THE ACTION
If you are interested in opening a trading account with CSB, enquire with one of our friendly Banking officers or get started online by setting up an account today.