Here's why surging oil prices may not derail the consumer trade
Despite rising oil prices due to geopolitical concerns, some investors remain positive on consumer stocks, citing continued demand for essential goods and resilient retail sales. Recent data shows six consecutive months of retail growth, supporting optimism in both consumer staples and discretionary sectors. Some asset managers are also pursuing strategies that avoid Big Tech and instead take long and short positions in energy and commodity markets.
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Despite the pressure from spiking energy costs, Khouw would still own consumer stocks."You'd expect diapers and toilet paper to continue to sell no matter how bad things get from a geopolitical standpoint," he said. Khouw is also constructive on the consumer discretionary side due to recent data reflecting resilience among consumers. The latest CNBC/NRF Retail Monitor data shows retail sales in March grew for the sixth month in a row."That is one of the areas where we continue to see better results actually coming out of the earnings that we've seen and some of the bullish flows," he said.
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