Retail rebound faces hurdles in 2022

Retail stocks have come a long way since the early days of the pandemic, with many brands catching investor interest in 2021.

Can this trend continue? Kevin Curran of TheStreet thinks so.

“As the pandemic began to spread across markets in early 2020, some of the hardest hit stocks were retailers who felt the pain of store closings and a shift to what we now call life” at foyer “”, Curran recently wrote in Real Money. “During the month of March during this initial stage, retail ETFs such as the Van Eck Retail ETF (RTH) – Get the VanEck Retail ETF report fell nearly 25%, while more vulnerable retailers like Macy’s (M) – Get the Macy’s Inc report, Nordstrom (JWN) – Get the report from Nordstrom, Inc., and Dillard (DDS) – Obtain the Class A report from Dillard’s, Inc. has experienced even greater declines of around 60% to 75% in a short period of time. “

But that was then and it is now. Fast forward to early 2022, and the aforementioned names have been the top performers.

“Retail brands are rebounding, with larger ancillary competitors and more diverse retailers like Walmart (WMT) – Get the report from Walmart Inc., Target (TGT) – Get the target company report and Costco (COST) – Get the Costco Wholesale Corporation report take the market to new heights, ”noted Curran. “This is the case as concerns about the pandemic have persisted and other issues, including supply chain, inflation and workforce issues, have come into play.”

Curran added that the resilience of retailers amid these headwinds is certainly surprising, especially given the emergence of the omicron strain. “While Amazon (AMZN) – Get the Amazon.com, Inc. report and e-commerce-focused retailers like Walmart were perhaps unsurprisingly powerful, the broader rally is undoubtedly calming for industry investors, ”he said.

However, the recent strength is not without warning against a return in consumer spending habits after such strong trends in recent times. It is all the more worrying that a higher bar is inevitably set for that retailers reach the top in 2022, “he added.

Take-out? At the very least, investors “will need to be selective, not only in the underlying retail sector they operate in, but also in terms of their ability to deal with the lack of support from the Fed, a near constant” in the past. decade, ”Curran said.

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