The Zacks Analyst Blog Highlights: Skechers, Rent-A-Center, Crocs, Lincoln Educational Services And Funko

For Immediate Release

Chicago, IL –September 3, 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: Skechers U.S.A., Inc. (NYSE:SKX) , Rent-A-Center, Inc. (NASDAQ:RCII) , Crocs, Inc. (NASDAQ:CROX) , Lincoln Educational Services Corp. (NASDAQ:LINC) and Funko, Inc. (NASDAQ:FNKO) .

Here are highlights from Friday’s Analyst Blog:

Consumer Spending Fuels Q2 GDP: Top Picks

Last month, the Department of Commerce’s initial estimate for second-quarter GDP pushed the economy’s most widely watched metric below the level recorded for the first quarter. Now, the latest estimate for the gauge has moved even lower, as was widely expected. Economists are attributing the slide to the fallout of the bitter U.S.-China trade war.

The petering out of the impact of Trump’s tax cuts is believed to be another reason for this significant decline in growth. However, GDP still surpassed some estimates, only due to the contribution from strong consumer spending.

This is why it still makes good sense to invest in consumer discretionary stocks, which derive strength from personal spending, universally acknowledged as the engine of the U.S. economy.

Trade War, Receding Impact of Tax Cuts Hurt GDP

Per the Commerce Department’s second estimate, GDP for the second quarter currently stands at an annualized rate of 2%. This is marginally lower than the pace of 2.1% estimated last month. It represents an even more significant slowdown from the 3.1% pace recorded in the first quarter. The economy expanded 2.6% during the first half of 2019.

Economists attribute this deceleration to the U.S.-China trade war. The conflict shows no sign of ending and has reduced business investment and hurt manufacturing. It now threatens to end the 11-year long economic expansion. Another reason for the loss in economic momentum is the receding impact of Trump’s tax cut and government spending drive.

Consumer Spending to the Rescue

Though the Fed Chair thinks that the economy is favorably positioned, the central bank is closely observing events. Jerome Powell has stated time and again that the Federal Reserve will “act as appropriate” to sustain the pace of economic momentum. Last month’s rate cut supports such a view and markets have already penciled in another reduction in rates after the Fed’s September meeting.

At this point, the only saving grace for the economy is the robust pace of consumer spending. The Department of Commerce raised its estimate for growth in consumer spending from 4.3% to 4.7% for the second quarter. The metric, which accounts for more than two-thirds of U.S. economic activity, benefited from higher spending overall, especially on autos, apparel and restaurants.

Strong consumer spending also helped American businesses rack up their first increase in profits in three quarters. The 5.3% rise in adjusted pretax corporate profits was also the first since mid-2014. Higher spending also contributed to a decline in inventory accumulation during the second quarter.

Our Choices

Despite the slowdown in economic growth, the U.S. economy remains in a strong position thanks to a solid burst of consumer spending. With American consumers remaining confident, the trend is likely to be sustained in the quarters ahead.

This is why investing in consumer discretionary stocks remains a prudent choice. However, picking winning stocks may be difficult.

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Written By: Zacks Investment Research