New York Restriction Lift Causes Retail Stocks To Spike
Florida and New York both announced plans to lift their remaining COVID-19 restrictions following the country- and state-wide drop in new cases and deaths. After that, New Jersey and Connecticut will start lifting the measures they currently have in place as well.
As CNBC reported, major retail stocks spiked on Monday following these announcements. Non-essential businesses that spent most of last year closed to curb the spread of the pandemic are now likely to get back to growing. The leisure, hospitality, and clothing industries are all amidst a re-hiring effort, and this reopening push will have a significant impact on the stock market.
Retail sales surged by 9.8% in March, as customers took advantage of their $1,400 stimulus checks. The clothing industry has seen some of the most significant gains, with consumers feverishly shopping for new attire to keep up with the numerous new trends popping up over the last year. Witnessing this renewed economic power in the consumer base, more and more investors are considering buying into the retail economy.
As a result, apparel retailer shares have all witnessed significant upticks: Dillard’s, the department store chain, stocks gained 9.7% in value, Macy’s share price rose by 8%, Nordstrom and Urban Outfitters hit 6%, while American Eagle and Kohl’s closed up with a 5% jump. Gap share prices settled at $35.47 after a continuous rise. According to the data gathered by NPD Group, 47.5% of US consumers are planning to purchase clothing in the next 60 to 90 days.
Eventually, the number of small businesses may rise as well, once the economy recuperates enough for such opportunities, which will likely be followed by an increase in bank offers to create new checking accounts.
Hopefully, we will soon see a much tighter labor market and steady growth of hourly wages. On the downside, this might result in higher inflation rates. Whether this retail windfall will go one way or the other is something we’ll see before long.