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The Zacks Analyst Blog Highlights Nexstar Media Group, Marriott Vacations Worldwide, Yum! Brands, Choice Hotels International and Acushnet Holdings
Zacks Equity Research
7 min read

In This Article:

For Immediate Release

Chicago, IL – July 19, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Nexstar Media Group Inc. NXST, Marriott Vacations Worldwide Corp. VAC, Yum! Brands Inc. YUM, Choice Hotels International Inc. CHH and Acushnet Holdings Corp. GOLF.

Here are highlights from Monday’s Analyst Blog:

5 Consumer Discretionary Stocks to Buy on Strong U.S. Demand

Last week, market participants were busy forecasting whether the Fed will raise the benchmark lending rate by 75 basis points or 1% in the upcoming FOMC meeting scheduled on Jul 26 and 27. The reason for this expected rate hike is the consumer price index data for June that soared 9.1% year over year.

Let's sidetrack the issue of the expected rate hike in July here. A little bit of in-depth thinking clearly reveals that rock-solid U.S. aggregate demand is the primary reason for the spike in the inflation rate. At this stage, we should think about a contra strategy.

A higher interest rate is detrimental to consumer-centric stocks, especially consumer discretionary stocks. However, robust demand is likely to drive both the top and the bottom line of these companies. Consequently, investment in consumer discretionary stocks should be fruitful going forward.

We have selected five consumer discretionary stocks with a favorable Zacks Rank. These are — Nexstar Media Group Inc., Marriott Vacations Worldwide Corp., Yum! Brands Inc., Choice Hotels International Inc. and Acushnet Holdings Corp.

Rock-Solid U.S. Demand

The primary source of current inflation is supply-centric. The pandemic-led complete devastation of the glob al supply-chain system and shortage of labor are two major sources that injected inflation into the post-pandemic U.S. economy. However, it is strong demand that brought the momentum in inflationary pressure.

U.S. citizens have received unprecedented support in the form of both fiscal and monetary stimuli in the last-two coronavirus ridden years. However, Americans were unable to spend more due to pandemic-related lockdowns and other restrictions.

Once the rate of COVID-19 infections marginalized and state governments repealed restrictions, the U.S. economy witnessed a strong pent-up demand buoyed by nearly $1.5 trillion in savings.

This robust demand helped U.S. businesses to a large extent to shift higher input costs and wage rates to the prices of the final products. For example, retail sales increased 1% in June outpacing the consensus estimate of 0.9%. Moreover, May's data was revised upward to a decline of 0.1% from a drop of 0.3% reported earlier.

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