Key messages
- Seasonality: The US retail sector historically performs well from November through to the end of the following April.
- Lower gasoline prices, a strong job market, and above-average real wage growth boost consumer confidence and spending power.
- A recent Gallup survey indicates Americans plan to spend nearly 10% more on Christmas presents this year, with many willing to spend over $1,000.
- Despite underperformance earlier in the year, the sector's current valuation is attractive, suggesting potential for positive surprises during the holiday season.
