What Happened?
A number of stocks fell in the afternoon session after the latest U.S. consumer confidence report revealed underlying weakness despite a headline increase, raising concerns about future spending.
While the Conference Board's headline Consumer Confidence Index rose to 97.2 in July, the details painted a more cautious picture for investors. The Present Situation Index, a measure of consumers' assessment of current business and labor market conditions, actually fell. More telling for the sector, the report showed a decline in buying intentions for major discretionary items such as homes, cars, and most appliances. This combination of factors signals potential weakness in future consumer spending, casting a shadow over companies that rely on non-essential purchases.
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:
- Leisure Facilities company Xponential Fitness (NYSE: XPOF) fell 3.6%. Is now the time to buy Xponential Fitness? Access our full analysis report here, it’s free.
- Leisure Facilities company Topgolf Callaway (NYSE: MODG) fell 3.1%. Is now the time to buy Topgolf Callaway? Access our full analysis report here, it’s free.
- Media company Scholastic (NASDAQ: SCHL) fell 3.4%. Is now the time to buy Scholastic? Access our full analysis report here, it’s free.
- Apparel and Accessories company Hanesbrands (NYSE: HBI) fell 4.2%. Is now the time to buy Hanesbrands? Access our full analysis report here, it’s free.
- Specialized Consumer Services company LKQ (NASDAQ: LKQ) fell 3%. Is now the time to buy LKQ? Access our full analysis report here, it’s free.
Zooming In On Hanesbrands (HBI)
Hanesbrands’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock gained 5.3% on the news that the major indices rebounded (Nasdaq +2.0%, S&P 500 +2.0%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025. Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand.
Hanesbrands is down 46.2% since the beginning of the year, and at $4.32 per share, it is trading 51.5% below its 52-week high of $8.91 from December 2024. Investors who bought $1,000 worth of Hanesbrands’s shares 5 years ago would now be looking at an investment worth $295.06.
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