Cyclical stocks are gaining momentum as the United States recovers from the worst recession since the Great Depression in the1930s. And we think expansionary fiscal and monetary policies and returning consumer trends should drive cyclical stocks such as AT&T (T), McDonald's (MCD), and Nutrien (NYSE:NTR) back to their pre-pandemic levels soon. Read on.Cyclical stocks tend to be influenced by an economy’s current performance. And the faster-than-expected macroeconomic recovery on the back of a rapid vaccination program has been driving U.S. consumer spending over the past couple of months.
The United States economy is now officially in recovery. The country’s GDP rose at a 6.4% annualized rate in the fiscal first quarter, ended March 31. Also, the economy also saw its unemployment rate tumble in Q1. Given this backdrop, cyclical stocks are expected to gain substantially in the near term.
We think AT&T Inc. (T), McDonald's Corporation (NYSE:MCD), and Nutrien Ltd. (NTR) have the potential to capitalize on their respective industry tailwinds with the economic recovery. This, coupled with their strong fundamentals, make them sound additions to one’s portfolio.