The resurgence of COVID-19 cases and continued inflationary pressure are continuing to keep investors worried about a slowdown in economic growth. But, surprisingly, retail sales increased in August. And a higher-than-usual holiday sales expectation should drive the performance of retail stocks. So, it could be wise to invest in quality retail stocks Industria de Diseño Textil (IDEXY), Shoe Carnival (NASDAQ:SCVL), and Tilly's (NYSE:TLYS) that have gained momentum and are well-positioned to maintain the same.Investors’ concerns over the pace of economic recovery due to the resurgence of COVID-19 cases have kept the market volatile. In addition, consumer confidence slumped to a seven-month low in September. Moreover, the United States faces severe supply-chain disruption and shortages due to shipping delays, which further aggravates the already high inflationary environment. Federal Reserve Chairman Jerome Powell expressed worries over inflation and expects the current pressures running into 2022.
However, the retail sales increased 0.7% in August compared to the expectation of a 0.8% decline. Also, the upcoming holiday season is expected to drive better-than-usual sales. So, turning to retail stocks with solid momentum could be rewarding.
Retail stocks Industria de Diseño Textil, S.A. (IDEXY), Shoe Carnival (NYSE:CUK), Inc. (SCVL), and Tilly's, Inc. (TLYS) have been witnessing solid momentum over the past few months and are well-positioned to keep rallying in the upcoming months dodging the market volatility.