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4 Discretionary Stocks to Buy as Consumer Confidence Hits 16-Month High
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The Wall Street post-election rally is far from over. All three major indexes have hit multiple all-time closing highs over the past month as expectations surrounding lower taxes and fewer regulations continue to soar under President-elect Donald Trump’s administration.
This has seen consumer confidence soar to a 16-month high in November as Americans believe the economy will prosper in the near term without inflation rising further. Given the positive outlook, it would be ideal to invest in discretionary stocks such as Cinemark Holdings, Inc. (CNK - Free Report) , The Walt Disney Company (DIS - Free Report) , Mattel, Inc. (MAT - Free Report) and Fox Corporation (FOX - Free Report) .
The Conference Board reported last week that the consumer confidence index climbed to 111.7 in November, up from a revised 109.6 in October, and surpassed the consensus estimate of a rise to 111.3. This marks the highest level since July 2023.
The Expectations Index, which reflects consumers' short-term views on income, business and job prospects, grew by 0.4% to 92.3 in November, staying well above the 80 threshold that signals a potential recession. Also, the Present Situation Index, which measures consumers’ perceptions of current business and labor market conditions, climbed 4.8 points to 140.9.
The post-election euphoria is primarily driving the jump in consumer confidence in November. The markets have also been rallying over the past month, with Trump’s victory fueling hopes for a strong economy. Investors are anticipating significant changes under his administration, including major tax cuts and reduced regulations.
Moreover, the minutes from the Federal Reserve's latest policy meeting showed that the central bank intends to implement additional rate cuts, though at a gradual pace, which will provide further support to the broader market. According to the CME FedWatch tool, there is a 73.8% chance of a 25-basis point rate cut in December.
4 Discretionary Stocks With Upside
Investing in discretionary stocks thus appears to be an ideal choice at this time. Personal income and consumer spending too have been steadily rising, which means consumers have more purchasing power and are spending aggressively. Also, the holiday season has started on a promising note and discretionary stocks are expected to gain from this trend.
Cinemark Holdings
Cinemark Holdings, Inc. is a leader in the motion picture exhibition industry. CNK operates 408 theatres and 4,657 screens in 38 states in the United States and internationally in 12 countries, mainly in Mexico, South and Central America.
Cinemark Holdings’ expected earnings growth rate for the current year is 49.3%. The Zacks Consensus Estimate for current-year earnings has improved 41.8% over the past 60 days. CNK currently carries a Zacks Rank #2.
Image Source: Zacks Investment Research
The Walt Disney Company
The Walt Disney Company has assets that span movies, television shows and theme parks. Revenues were $91.4 billion in fiscal 2024. DIS’ fourth-quarter fiscal 2024 results reflect growth in Disney+ subscribers and Media and Entertainment Distribution businesses. Domestic theme park and resort businesses gained due to guest spending growth attributable to increases in per capita guest spending at theme parks and cruise lines.
The Walt Disney Company’s expected earnings growth rate for the current year is 8.3%. The Zacks Consensus Estimate for current-year earnings improved 4.9% over the last 60 days. DIS presently has a Zacks Rank #2.
Image Source: Zacks Investment Research
Mattel, Inc.
Mattel, Inc. is the world’s largest manufacturer of toys. MAT’s products are sold directly to retailers and wholesalers in most European, Latin American and Asian countries as well as in Australia, Canada and New Zealand through the Mattel Girls & Boys Brands, Fisher-Price Brands, American Girl Brands, and Construction and Arts & Crafts Brands.
Mattel’s expected earnings growth rate for the current year is 18.7%. The Zacks Consensus Estimate for the current-year earnings has improved 2.1% over the past 60 days. MAT presently has a Zacks Rank #2.
Image Source: Zacks Investment Research
Fox Corporation
Fox Corporation produces and distributes news, sports and entertainment content. FOX’s brand includes FOX News, FOX Sports, the FOX Network, the FOX Television Stations and sports cable networks FS1, FS2, Fox Deportes and Big Ten Network.
Fox Corporation’s expected earnings growth rate for the current year is 7.6%. The Zacks Consensus Estimate for the current-year earnings has improved 2.8% over the past 60 days. FOX presently carries a Zacks Rank #2.
Image Source: Zacks Investment Research
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4 Discretionary Stocks to Buy as Consumer Confidence Hits 16-Month High
The Wall Street post-election rally is far from over. All three major indexes have hit multiple all-time closing highs over the past month as expectations surrounding lower taxes and fewer regulations continue to soar under President-elect Donald Trump’s administration.
This has seen consumer confidence soar to a 16-month high in November as Americans believe the economy will prosper in the near term without inflation rising further. Given the positive outlook, it would be ideal to invest in discretionary stocks such as Cinemark Holdings, Inc. (CNK - Free Report) , The Walt Disney Company (DIS - Free Report) , Mattel, Inc. (MAT - Free Report) and Fox Corporation (FOX - Free Report) .
Each of these stocks has seen positive earnings estimate revision in the past 60 days and carries a Zacks Rank #1 (Strong Buy) and 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Trump’s Win Boosts Consumer Confidence
The Conference Board reported last week that the consumer confidence index climbed to 111.7 in November, up from a revised 109.6 in October, and surpassed the consensus estimate of a rise to 111.3. This marks the highest level since July 2023.
The Expectations Index, which reflects consumers' short-term views on income, business and job prospects, grew by 0.4% to 92.3 in November, staying well above the 80 threshold that signals a potential recession. Also, the Present Situation Index, which measures consumers’ perceptions of current business and labor market conditions, climbed 4.8 points to 140.9.
The post-election euphoria is primarily driving the jump in consumer confidence in November. The markets have also been rallying over the past month, with Trump’s victory fueling hopes for a strong economy. Investors are anticipating significant changes under his administration, including major tax cuts and reduced regulations.
Moreover, the minutes from the Federal Reserve's latest policy meeting showed that the central bank intends to implement additional rate cuts, though at a gradual pace, which will provide further support to the broader market. According to the CME FedWatch tool, there is a 73.8% chance of a 25-basis point rate cut in December.
4 Discretionary Stocks With Upside
Investing in discretionary stocks thus appears to be an ideal choice at this time. Personal income and consumer spending too have been steadily rising, which means consumers have more purchasing power and are spending aggressively. Also, the holiday season has started on a promising note and discretionary stocks are expected to gain from this trend.
Cinemark Holdings
Cinemark Holdings, Inc. is a leader in the motion picture exhibition industry. CNK operates 408 theatres and 4,657 screens in 38 states in the United States and internationally in 12 countries, mainly in Mexico, South and Central America.
Cinemark Holdings’ expected earnings growth rate for the current year is 49.3%. The Zacks Consensus Estimate for current-year earnings has improved 41.8% over the past 60 days. CNK currently carries a Zacks Rank #2.
Image Source: Zacks Investment Research
The Walt Disney Company
The Walt Disney Company has assets that span movies, television shows and theme parks. Revenues were $91.4 billion in fiscal 2024. DIS’ fourth-quarter fiscal 2024 results reflect growth in Disney+ subscribers and Media and Entertainment Distribution businesses. Domestic theme park and resort businesses gained due to guest spending growth attributable to increases in per capita guest spending at theme parks and cruise lines.
The Walt Disney Company’s expected earnings growth rate for the current year is 8.3%. The Zacks Consensus Estimate for current-year earnings improved 4.9% over the last 60 days. DIS presently has a Zacks Rank #2.
Image Source: Zacks Investment Research
Mattel, Inc.
Mattel, Inc. is the world’s largest manufacturer of toys. MAT’s products are sold directly to retailers and wholesalers in most European, Latin American and Asian countries as well as in Australia, Canada and New Zealand through the Mattel Girls & Boys Brands, Fisher-Price Brands, American Girl Brands, and Construction and Arts & Crafts Brands.
Mattel’s expected earnings growth rate for the current year is 18.7%. The Zacks Consensus Estimate for the current-year earnings has improved 2.1% over the past 60 days. MAT presently has a Zacks Rank #2.
Image Source: Zacks Investment Research
Fox Corporation
Fox Corporation produces and distributes news, sports and entertainment content. FOX’s brand includes FOX News, FOX Sports, the FOX Network, the FOX Television Stations and sports cable networks FS1, FS2, Fox Deportes and Big Ten Network.
Fox Corporation’s expected earnings growth rate for the current year is 7.6%. The Zacks Consensus Estimate for the current-year earnings has improved 2.8% over the past 60 days. FOX presently carries a Zacks Rank #2.
Image Source: Zacks Investment Research