A rise in consumer spending driven by gradual job growth and multiple direct stimulus checks has been fueling the growth of consumer companies. And because the U.S.’ fast-paced COVID-19 vaccination program could lead to a further increase in consumer spending, we think McDonald's (MCD), Best Buy (BBY), and American Eagle (AEO) are poised to benefit in the coming quarters. Read on.A faster-than-expected economic recovery and job growth have drove aggregate spending up significantly last two month. According to the U.S. Department of Commerce, the Personal Consumption Expenditures Price Index rose 3.6% sequentially in April. Multiple fiscal stimulus checks distributed since last year have also contributed to the rise in consumer spending.
Due to the success nations’ ongoing vaccination drive, many consumer companies are improving their services and launching new products to capitalize on an expected increase in demand this summer. Overall, consumer stocks are benefitting from the gradual reopening of the economy and rising consumer spending. This is evident in Vanguard Consumer Discretionary ETF’s (VCR) 22.3% returns versus SPDR S&P 500 Trust ETF’s (SPY) 19% gains over the past nine months.
Given this backdrop, we think the stocks of McDonald's Corporation (NYSE:MCD), Best Buy Co., Inc. (NYSE:BBY) and American Eagle Outfitters , Inc. (NYSE:AEO) are well positioned to benefit in the coming months.