It was a mixed weekend for the consumer.
First, in the travel industry, TSA screened more than 14 million travelers from Monday to Sunday, more than double last year but still falls short of 2019 levels. The emergence of the omicron variant also made us think about travel stocks earlier in the week.
In the retail sector, meanwhile, Black Friday turnout was disappointing, with store traffic falling nearly 30% this year compared to 2019. Analysts continue to expect significant increases in overall holiday spending.
And then there is a rebound in the box office. The holiday weekend in the US and Canada has surpassed $ 142 million thanks to the Gucci House and Disney’s Encanto.
CNBC’s “Trade Nation” asked two market watchers where they are investing in the consumer, given the strangulation of Covid as it returns to normal.
“The omicron variant is a fly in the ointment in part because we don’t yet know what it is,” Gina Sanchez, chief market strategist at Lido Advisors, said Monday. “We have expectations that we will continue to rebound. We love Delta Air Lines here, for example, even though they were imposed thanks to the new travel bans. ”
Delta has dropped 9% over the past week. It has dropped 31% from its March high.
However, if the emerging omicron threat turns out to be worse than feared, Sanchez says, it makes sense to double the value of some of the more defensive stocks already in Lido’s portfolio.
“Walmart is one of them. Walmart is a company that has been a big winner in evil supply chains and they were able to manage their supply chain and really beat the competition, ”she said.
“The other is a digital game, namely Amazon … This year has been tougher because of the discovery, but we don’t think this story will go away,” she said.
Both Walmart and Amazon are lagging behind the market this year. Walmart is down 1% in 2021, while Amazon is up 9%. In comparison, the S&P 500 gained 24%.
Ari Wald, head of technical analysis at Oppenheimer, agrees with Sanchez that Amazon appears to be the likely winner. He says the stock has been “the best looking in recent times” for several reasons.
“From a top-down perspective, this is the idea that macroeconomic trends are converging again to support fast-growing investment,” Wold said in the same interview. “As rates and commodities move into range, given some of these near-term uncertainties, we see the relative strength of these higher growth ideas. [such as Amazon]… “
“Looking at Amazon’s trend towards the S&P 500, it really matters from a bottom-up perspective,” he said. “It has been performing poorly since July 2020, when it last peaked relative to the market … and is now showing signs of stabilization.”
Wold adds that a move back above the 200-day moving average against the S&P 500 will support Amazon’s gains even further.
Disclosure: Lido Advisors owns shares in Delta Air Lines, Amazon and Walmart.
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