NEW YORK—As the most important shopping period of the year approaches, some investors are betting shares of beaten-down consumer stocks will benefit if inflation keeps falling and retail sales stay strong.
Consumer discretionary stocks, a group whose members run the gamut from Amazon.com Inc. and automaker Tesla Inc. to retailer Target Corp., have been walloped by surging prices, with the S&P 500’s consumer discretionary sector falling nearly 33 percent for the year to date compared with a nearly 17 percent fall for the broader index.
Yet recent data has shown signs that inflation may be ebbing in the face of stronger-than-expected retail spending, raising cautious optimism that the economy could avoid a recession or experience only a mild downturn. Investors poured a net $1.05 billion into consumer discretionary stocks in the past week, the sixth-largest weekly inflows since 2008, data from BofA Global Research showed….