The trajectory of United States’ economic recovery is just behind China’s, with the country deploying a combination of fiscal and monetary policies to overcome the pandemic-driven recession. With investors now focusing on “outdoor” cyclical stocks amid the economic recovery, Reddit forum wallstreetbets (WSB) expects Academy Sports and Outdoors (ASO) and Ethan Allen Interiors (NYSE:ETH) to generate substantial returns soon. So please read on for a closer look at these two companies.The U.S. economy has been recovering from the ravages of the COVID-19 pandemic at a faster-than-expected pace, supported by multiple fiscal stimulus packages and the Fed’s continued dovish monetary policy stance. According to the Bureau of Economic Analysis (BEA), the country’s real GDP increased at a 6.4% annual rate in the first quarter ended March 31.
According to CNBC/Moody’s Analytics Rapid Update of economists’ forecasts, median GDP growth expected for the second quarter is 9.3%.Consequently, investors have been rotating into cyclical stocks that are well positioned to thrive in an economic recovery. Given surging inflation and rising benchmark Treasury yields, popular Reddit community wallstreetbets has also been focusing on cyclical stocks.
Given this backdrop, we expect WSB favorites Academy Sports and Outdoors, Inc. (ASO) and Ethan Allen Interiors Inc . (ETH) to deliver robust returns in the near term.