Key points
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Good prospects for holiday spending: A pliable landing, rising wages and solid consumer confidence set the stage for record holiday spending.
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Storage possibilities in various sectors: Retail giants, e-commerce, specialty stores, travel agencies and gaming companies may be poised for growth this season.
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ETFs for diversification: Browse thematic ETFs to capture gains in retail, entertainment and e-commerce trends.
Cheerful prospects for spending your holidays
As the holiday season heats up, the U.S. economy is laying a solid foundation for solid spending. A resilient consumer coupled with improving macroeconomic conditions makes for optimism for the 2024 holiday shopping season. Here’s why this season could bring record numbers:
Soft landing on the horizon: The U.S. economy has weathered the challenges of inflation and interest rates exceptionally well. With expectations of potential interest rate cuts in 2024, growth prospects have improved significantly.
Resilient consumers: Rising real wages and the wealth effect resulting from rising stock markets and house price appreciation have increased purchasing power. Consumer confidence remains solid, even with higher borrowing costs.
Record holiday spending: The National Retail Federation predicts a 3% augment in holiday sales compared to last year, reflecting continued consumer demand despite the shortened shopping season. Deloitte research shows that consumers plan to spend an average of $1,778 this year, up 8% from 2023, with experiences prioritizing gifts.
Early shopping trends: Nearly half of holiday shoppers started shopping before November, a trend that reflects greater consumer planning and demand for seasonal offers.
Strong company guidelines: Positive earnings reports boost confidence in the season, with Walmart hitting record highs. Abercrombie & Fitch, Gap and Williams-Sonoma report mighty starts, while Airbnb and United Airlines forecast mighty vacation demand, especially for travel and attractions.
Source: Deloitte
Stock market guide for the holiday season
From retail to travel, here’s a look at the sectors and stocks predicted to benefit from holiday spending:
Retail giants
Walmart (WMT): Meets holiday demand with affordable staples and gifts.
Amazon (AMZN): Dominates thanks to the Prime ecosystem and Black Friday sales.
Cost (COST): Appeal to shoppers in droves for holiday treats and gifts.
Best Buy (BBY): Benefit from high demand for electronics and technology gadgets.
Specialized retail
Ralph Lauren (RL): High-class clothing and accessories for Christmas gifts.
Tapestry (TPR): Owner of Coach and Kate Spade, capitalizing on luxury trends.
Abercrombie & Fitch (ANF): Trend-following clothing for younger customers.
Urban Outfitters (URBN): Exclusive offers for Millennials and Gen Z customers.
Lululemon (LULU): Popular sports brand with devoted customers.
Gap (GAP): Affordable, stylish clothing attracts customers from luxury holiday stores.
Travel and leisure
Delta Airlines (DAL): Greater demand for travel translates into higher ticket revenues.
United Airlines (UAL): You can benefit from an augment in the number of people traveling on holiday.
Expedia (EXPE): Increased number of flight, hotel and holiday package bookings.
Marriott International (MAR): Popular for family reunions and vacations.
Airbnb (ABNB): High demand for unique stays during the holidays.
Reservation holdings (BKNG): Solid bookings for global holiday travel.
Carnival Cruise Lines (CCL): Experience-based gifts augment cruise bookings.
Toys and games
Hasbro (HAS): Popular toys like Monopoly and Nerf augment seasonal sales.
Mattel (MAT): Barbie and Hot Wheels remain the most popular holiday attractions.
Electronic Art (EA): Video games like FIFA are perennial favorites.
Roblox (RBLX): An addictive gaming platform loved by children and teenagers.
Streaming and Entertainment
Netflix (NFLX): Tyson fight. Exclusive and powerful original content should drive subscriptions.
Disney (DIS): New movie releases and Disney+ offerings could boost revenues. Holiday travel can also excite you about theme parks.
Credit cards and payments
Visa (V): Higher transaction volumes during peak shopping hours.
Mastercard (MA): Benefit from global holiday spending trends.
American Express (AXP): High demand among wealthy customers.
PayPal (PYPL): Increase in e-commerce transactions during the holiday season.
Confirm (AFRM): Buy now, pay later services boost holiday sales.
Health and personal care
CVS Health (CVS): Positioned to benefit from increased demand for wellness products.
Walgreens Boots Alliance (WBA): Continued demand for pharmaceuticals and personal care.
Bath & Body Works (BBWI): Holiday scents and gift sets augment sales.
Procter & Gamble (PG): Increased demand for household and personal care products.
Estée Lauder (EL): Holiday gifts augment sales of premium skincare and cosmetics products.
ETF ideas for broader exposure
For investors looking to diversify, these ETFs provide targeted exposure to sectors that can benefit from holiday spending:
SPDR S&P Retail ETF (XRT) .: Tracks the top retail stocks in the US.
iShares Basic US Consumer ETF (IYK): Includes consumer staples.
VanEck Video Games and Esports UCITS ETF (ESPO): It focuses on the gaming and e-sports industry.
Invesco Recreation and Entertainment ETF (PEJ): Offers contact with travel and recreation.
Global X E-commerce ETF (EBIZ): Capturing the online retail boom.
Read the original analysis: Holiday stock picks: A guide for the season of cheer
