While retail investors look to pad out their meme stocks list, cyclical stocks appear to be back in style. This would be the case as inflation fears and figures continue to cause shifts in the stock market today. Namely, with the consumer price index up by 5.4% in June, its largest increase since August 2008, the reopening trade seems to be gaining momentum. On this matter, the Federal Reserve is maintaining its belief that the current figures we see are transitory and expected from a recovering economy. Furthermore, U.S. retail sales in June reportedly gained by 0.6% month-over-month, bouncing back from May’s 1.7% drop. With all of this in play, I could potentially see cyclical stocks having more room to run moving forward.
If anything, cyclicals are often a key area of interest in the stock market when the economy is doing well. This is because cyclical stocks are linked to companies in the industrial and consumer discretionary markets. On one hand, government spending on infrastructure and construction efforts is on the rise. Because of this, companies such as Caterpillar (NYSE: CAT) and John Deere (NYSE: DE) continue to flourish. On the other hand, companies that focus on consumer discretionary spending have and are still riding stimulus check-related tailwinds. This would see investors turning their attention towards retail stocks like Lovesac (NASDAQ: LOVE) and travel stocks such as Disney (NYSE: DIS).
Overall, all four of these companies’ shares are looking at gains of over 110% since their pandemic era lows. Given the recent momentum in consumer spending, we will be taking a look at four hot names in that part of the cyclical industry today.Best Cyclical Stocks To Buy [Or Sell] This Month
- Nike Inc. (NYSE: NKE)
- Royal Caribbean Cruises Ltd. (NYSE: RCL)
- Amazon.com Inc. (NASDAQ: AMZN)
- Carnival Corporation (NYSE: CCL)
Nike is a multinational cyclical company that is headquartered in Portland. The company is famous for its industry-leading athletic footwear and apparel that caters to a wide variety of sports and fitness activities. The company also owns Converse, a lifestyle footwear, apparel, and accessories brand. Recently, Nike announced that it will be introducing its highly anticipated Air Max 2021. The upcoming model builds on the legacy of the footwear line with a sustainable construction that utilizes at least 20% recycled materials. NKE stock currently trades at $159.85 going into Monday morning’s trading session. Last month, the company reported strong fourth-quarter and full-year results.
Diving in, the company posted fourth-quarter revenue of $12.3 billion, up by 96% year-over-year. Its full-year revenue was 19% up at $44.5 billion. Nike also reported diluted earnings per share of $0.93 for the fourth quarter and $3.56 for the full year. These impressive financials would demonstrate the company’s competitive advantage and deep connection with consumers all over the world. It does have a very loyal brand following after all. Despite firing on all cylinders, the company continues to invest in innovation and its digital platform for long-term growth. All things considered, will you consider adding NKE stock to your portfolio?Source: TD Ameritrade TOS
Read MoreRoyal Caribbean Cruises Ltd
Royal Caribbean (RCL) is a global cruise holding company that is based in Miami, Florida. It is one of the largest cruise line operators in the world. It operates three global cruise vacation brands, namely, Silversea, Royal Caribbean International, and Celebrity Cruises. Together, it operates over 50 ships with an additional 14 on order as of March 31, 2021. RCL stock currently trades at $72.39 as of Friday’s close. Earlier in the month, the company announced that its Royal Caribbean makes a highly anticipated U.S. return.
After a nearly 16-month journey, Freedom of the Seas became the first Royal Caribbean ship in the U.S. to welcome guests. “We have a lot to celebrate. Families and loved ones can finally come together after more than a year apart, and we’re now welcoming them back on board to make up for that lost time,” said Michael Bayley, president, and CEO, Royal Caribbean International. “For a moment as meaningful as Fourth of July weekend, it couldn’t be more appropriate that Freedom of the Seas be the first ship to ring in our return to cruising in the U.S. and delivering the memorable and safe vacations Royal Caribbean is known for. Summer family vacations are back, and we are just getting started.” Given how the reopening of the cruise industry is taking off at full speed, will you consider buying RCL stock?Source: TD Ameritrade TOS Amazon.com Inc.
Amazon is a cyclical company that focuses on a variety of tech services. This would include e-commerce, cloud computing, digital streaming, and artificial intelligence. Notably, its Amazon Web Services (AWS) announced on Thursday the general availability of Amazon HealthLake, a HIPAA-eligible service for health care and life sciences organizations. It will allow these organizations to store, query, and analyze their health data at scale. Amazon HealthLake uses machine learning to understand and extract meaningful medical information from vast amounts of data. AMZN stock currently trades at $3,573.63 as of Friday’s closing bell.
In late June, AWS was named Swisscom’s preferred public cloud provider to accelerate its digital transformation strategy to move towards cloud-native 5G. Swisscom is pursuing a cloud-first strategy and will use AWS to increase IT agility, drive operational efficiencies, and accelerate time to market for new information and communications technology (ICT) features and services. Seeing how the company continues to expand on all fronts, is AMZN stock worth buying?Source: TD Ameritrade TOS Carnival Corporation
Another top name in the cyclical space now would be the Carnival Corporation. For the uninitiated, Carnival is a leading player in the cruise line industry globally now. In its massive portfolio, the company boasts a combined fleet of over 100 vessels across its 10 cruise line brands. In particular, the recent return of cruise operations in the U.S. would see some wind in Carnival’s sails now. As of July 3, the company is now offering voyages again albeit at reduced capacities. Because of all this, I can imagine that CCL stock would be in focus now. With the company’s shares currently trading at $20.92 apiece at the end of Friday’s trading session, could it be worth investing in?
While that remains to be seen, Carnival does not seem to be sitting idly by. In fact, the company is leveraging the current momentum in the industry, launching yet another cruise experience. As of yesterday, the Carnival Breeze is back in action on a four-day cruise from Galveston. Notably, this would mark Carnival’s third U.S. cruise line returning to service this month. It is also important to note that Carnival Breeze offers shorter cruise experiences to consumers. This would serve to gradually ease travelers back into the groove of sailing amidst the current pandemic. With Carnival offering convenient and affordable getaways to eager customers, will you be adding CCL stock to your buy list?Source: TD Ameritrade TOS