The Zacks Analyst Blog Highlights: Guess', Hasbro, Live Nation Entertainment, Skechers U.S.A. And Under Armour

For Immediate Release

Chicago, IL – July 30, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Guess', Inc. (NYSE:GES) , Hasbro, Inc. (NASDAQ:HAS) , Live Nation Entertainment, Inc. (NYSE:LYV) , Skechers U.S.A., Inc. (NYSE:SKX) and Under Armour, Inc. (NYSE:UAA) .

Here are highlights from Monday’s Analyst Blog:

Strong Consumer Spending Powers GDP Growth: 5 Winners

The U.S. economy slowed down but maintained a steady pace of growth in the second quarter. Consumer spending surged and helped the economy gain traction, making up for a decline in business investment amid trade uncertainties and cooling global activities.

This calls for investing in consumer discretionary companies that are poised to grow on signs of consumer spending strength.

Better-Than-Expected Q2 GDP Growth

Economic growth in the United States has once again exceeded estimates in the second quarter. According to the Bureau of Economic Analysis (BEA), the real or in other words inflation-adjusted GDP expanded at an annualized rate of 2.1%, which surpassed expectations of a 1.9% reading. But, economic growth slowed down from a 3.1% gain in the first three months of the year. And it was mostly because of weakness in business investment.

Exporters and manufacturers took a beating in the said quarter, mostly due to a deteriorating global economy and trade dispute between the United States and China. Gross private domestic investment dropped 5.5%, which includes a whopping 10.6% fall in investment in structures. Nonetheless, GDP was able to exceed consensus expectations, predominantly because of robust consumer spending.

Economy Gets a Boost From Solid Consumer Spending

Consumer spending, which accounts for more than two-third of economic output, grew at an annualized rate of 4.3% in the second quarter, adjusted for inflation, and blew past expectations. In fact, consumer outlay in the said quarter registered the fastest growth rate since fourth-quarter 2017 and also the fifth fastest since first-quarter 2006. This is indeed a solid comeback, since consumer outlays were pretty soft in the fourth quarter of last year and first quarter this year.

Adjusted for inflation, consumer spending on durable goods rose at an annualized rate of 12.9%, and for non-durable goods, it climbed 6%. As a result, spending for all goods combined came in at 8.3%. For services, by the way, spending rose 2.5%.

What Drove Consumer Spending?

Buoyed by job additions, the lowest unemployment rate in almost 50 years and steady rise in income, Americans are on a spending spree.

The United States added a heartening 224,000 jobs last month, way higher than analysts’ expectations of 170,000 jobs, per the Labor Department. Such stellar job additions calmed nerves about the health of the economy, which has now entered its 11th year of expansion. It’s worth pointing out that May’s job additions of 72,000 raised doubts about the current state of the economy.

Nonetheless, hiring last month was widespread, defying disputes between the United States and its trading partners as well as slowdown in global economic growth that affected American exports and dented businesses and consumer confidence.

Professional and business services added 51,000 new jobs, while health care saw another 35,000 job addition. Transportation and warehousing added 24,000 jobs. Meanwhile, construction added 21,000 and manufacturing saw another 17,000 jobs added, way higher than its 2019 monthly average of 8,000.

Unemployment rate, by the way, edged up to 3.7% from 3.6% but is still near a 50-year low. The U-6 rate ticked up to 7.2%. However, the rate of underemployment is below where it was a few years back. What’s more, the phenomenal jobs report shows that hourly pay has gone up by 6 cents to $27.90 an hour. In the last 12 months, wage gains held steady at 3.1%.

Consumer Spending Continues to Drive Output: 5 Winners

Courtesy of a rise in household spending, consumer discretionary companies are poised to benefit the most as outlays play a major role in determining their revenues. We have, thus, selected five consumer discretionary stocks that flaunt a Zacks Rank #1 (Strong Buy). You can see Zacks Investment Research

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Written By: Zacks Investment Research