What Happened?
A number of stocks jumped in the afternoon session after strong retail sales data for May revealed that consumer spending was robust despite inflation and high gas prices.
According to the CNBC/NRF Retail Monitor, sales, excluding autos and gas, rose 0.42% from the previous month and a significant 7.19% year-over-year. This marks the eighth consecutive month of growth. NRF President and CEO Matthew Shay noted that the momentum was driven by a "resilient labor market and consumers' continued willingness to spend."
This positive trend was further bolstered by the U.S. Red Book report, which showed sales rising to a 9.1% annual rate through the first week of June. These figures suggest that consumer health is holding up, providing a positive outlook for retailers.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Consumer Discretionary - Real Estate Services company Newmark (NASDAQ: NMRK) jumped 4.2%. Is now the time to buy Newmark? Access our full analysis report here, it’s free.
- Consumer Discretionary - Leisure Products company Clarus (NASDAQ: CLAR) jumped 4.1%. Is now the time to buy Clarus? Access our full analysis report here, it’s free.
- Consumer Discretionary - Real Estate Services company JLL (NYSE: JLL) jumped 4.2%. Is now the time to buy JLL? Access our full analysis report here, it’s free.
Zooming In On Newmark (NMRK)
Newmark’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 20 days ago when the stock gained 3.4% on the news that a trio of major retailers reported stronger-than-expected first-quarter earnings.
The synchronized beat from companies including Target, Lowe's, and TJX signaled a potential turn in consumer discretionary momentum, triggering a sector rotation back into U.S. retail stocks. The results suggest American household spending remains more resilient than analysts had feared at the start of the quarter.
Target, for example, saw a 6.7% increase in net sales, reversing several quarters of decline, with store traffic up 4.4%. These positive reports, particularly from discount-oriented retailers, indicate that while consumers may be navigating inflation, they are still spending, especially when focused on value.
Newmark is down 10.5% since the beginning of the year, and at $15.19 per share, it is trading 22.4% below its 52-week high of $19.58 from September 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Newmark’s shares 5 years ago would now be looking at an investment worth $1,168.
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