U.S. stock markets are flying high in November after three consecutive months of decline. Most of the market participants are confident that the Fed has already come to an end of the current interest rate hike cycle. The CME FedWatch tool has associated a 97% probability that the central bank will keep the benchmark lending rate unchanged at 5.25-5.5%.

Month to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have rallied 7.2%, 8.6% and 11.1%, respectively. Moreover, the U.S. economy is likely to flourish in 2024 as the Fed is set to initiate a rate cut in the second half of the year.

Meanwhile, the Conference Board reported that the index for Consumer Confidence in November came in at 102, beating the consensus estimate of 101. The metric has risen for the first time after three straight monthly declines. October’s reading was revised downward to 99.1 from 102.6 reported earlier.

The Present Situation Index— based on consumers’ assessment of current business and labor market conditions— fell marginally to 138.2 in November from 138.6 in October. The Expectations Index— based on consumers’ short-term outlook for income, business, and labor market conditions— rose to 77.8 in November from 72.7 in October.

Notably, any reading of the Expectations Index below 80, historically signals a recession within the following year. Despite this, the percentage-wise month-over-month increase was remarkable. The study shows that consumers’ concerns of an impending recession dropped to the lowest level this year.

Our Top Picks

We have narrowed our search to five consumer-centric stocks with strong upside potential for 2024. All these stocks have witnessed robust earnings estimate revisions in the last 60 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the price performance of our five picks in the past three months.

Image Source: Zacks Investment Research

Live Nation Entertainment Inc. (LYV Quick QuoteLYV - Free Report) is benefiting from pent-up demand for live events, robust ticket sales and the sponsorship and advertising business. LYV remains optimistic about its growth prospects in 2023.

For concerts, LYV stated that it has already sold more than 117 million tickets (as of June 2023), up 20% from the 2022 levels. In terms of tickets, LYV is likely to benefit from the market pricing trend. Also, the emphasis on new client and venue additions bodes well.

Zacks Rank #1 Live Nation Entertainment has an expected revenue and earnings growth rate of 7.7% and 54.4%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 34.5% over the last 30 days.

InterContinental Hotels Group plc (IHG Quick QuoteIHG - Free Report) owns, manages, franchises, and leases hotels in the Americas, Europe, Asia, the Middle East, Africa, and Greater China. IHG also provides the IHG Rewards loyalty program.

IHG operates hotels under the Six Senses, Regent, InterContinental Hotels & Resorts, Vignette Collection, Kimpton Hotels & Restaurants, Hotel Indigo, EVEN Hotels, HUALUXE, Holiday Inn, Holiday Inn Express, Holiday Inn Club Vacations, avid, Staybridge Suites, Atwell Suites, Candlewood Suites, voco, and Crowne Plaza.

Zacks Rank #1 InterContinental Hotels has an expected revenue and earnings growth rate of 3.7% and 15%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 1.2% over the last 60 days.

Royal Caribbean Cruises Ltd. (RCL Quick QuoteRCL - Free Report) has been benefiting from solid demand for cruising and acceleration in booking volumes. RCL’s emphasis on strong pricing (on closer-in-demand) bodes well.

In the third quarter, RCL reported accelerating demand for 2024 sailings. RCL intends to focus on new innovative ships and onboard experiences to boost its offering and deliver superior yields and margins.

Zacks Rank #1 Royal Caribbean Cruises has an expected revenue and earnings growth rate of 13.7% and 37.4%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 0.3% over the last seven days.

Hilton Worldwide Holdings Inc.’s (HLT Quick QuoteHLT - Free Report) performance was attributable to the upward trend in travel and tourism. HLT benefits from its focus on unit expansion, hotel conversions, strategic partnerships and loyalty programs.

HLT expects positive development trends to continue on the back of new development and conversion opportunities. For third-quarter 2023, management anticipates system-wide RevPAR to increase in the 4-6% band on a year-over-year basis.

Zacks Rank #2 Hilton Worldwide Holdings has an expected revenue and earnings growth rate of 7.1% and 15%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 0.6% over the last 30 days.

NIKE Inc. (NKE Quick QuoteNKE - Free Report) displayed strength over the past year. Continued progress on Consumer Direct Acceleration strategy, compelling product innovation and digital leadership have been drivers of growth. This aided NKE’s retail sales across Nike Direct and wholesale businesses in first-quarter fiscal 2024.

NKE’s digital business has been gaining from robust consumer trends, including momentum in the NIKE mobile app led by improved traffic and increased member buying frequency. Backed by solid consumer momentum, a robust innovation pipeline and strong inventory, management provided solid outlook for fiscal 2024.

Zacks Rank #2 NIKE has an expected revenue and earnings growth rate of 3.8% and 15.8%, respectively, for the current year (ending May 2024). The Zacks Consensus Estimate for current-year earnings has improved 1.1% over the last 60 days.