Retail stocks search for direction as rates stay high

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High-flying sector faces a test

Elevated U.S. interest rates are pressuring the U.S. retail sector, where shares of many companies have been dented by months of tight monetary policy while a select few have soared.

The consumer will be in focus next week when the U.S. reports retail sales data on Tuesday. Analysts polled by Reuters expect retail sales to have grown by 0.2% in May. Weaker-than-expected results - following data earlier this week showing encouraging progress on inflation - could bolster the case for the Fed to ease rates sooner rather than later.

Halter’s fund has been buying shares of companies such as Walmart, Costco, and TJX Companies whose business models emphasize value for the consumer. Their shares are up 28%, 29% and 16% respectively. Bokeh Capital Partners owns shares of Urban Outfitters , which are up over 20% this year. Kim Forrest, Bokeh’s chief investment officer, said Urban Outfitters’ strength as a fashion merchandiser has helped the company weather the inflationary environment, adding “people will sacrifice to look good.”

 

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Retail stocks search for direction as rates stay highElevated U.S. interest rates are pressuring the U.S. retail sector, where shares of many companies have been dented by months of tight monetary policy while ...
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