4 Solid Stocks to Buy on Improving Consumer Sentiment

U.S. consumer sentiment has been improving as recent data has indicated easing inflation over the past three months. Soaring inflation has compelled people to spend cautiously and the Fed’s aggressive rate hike policy has been igniting fears of a recession.

However, the apprehensions have been waning lately, with commodity prices showing signs of cooling, which has been giving a boost to consumer sentiment. Given this scenario, stocks like InterContinental Hotels Group PLC IHG, Sportradar Group AG SRAD, OneSpaWorld Holdings Limited OSW and Six Flags Entertainment Corporation SIX are likely to benefit in the near term.

Consumer Sentiment Rebounding

The University of Michigan’s preliminary February reading of the consumer sentiment index increased to 66.4 from January’s reading of 64.9. This is the index’s highest reading since January 2022.

January’s consumer sentiment reading also came in higher than economists’ expectations of 65.0.

The index measuring current economic conditions also increased to 72.6 in February from 68.4 in January, indicating a significant improvement in consumers’ views of the state of the economy.

Understandably, consumers are more optimistic about the economy right now. The consumer sentiment index hit a low of 50.0 in June 2022 and has since rebounded substantially. Colling commodity prices have brought in a sigh of relief for consumers. Also, data shows that inflation has been easing over the past three months.

The rally in the stock market and the ongoing strength of the labor market may have spurred the improvement in consumer sentiment. This has raised hopes that the economy may have a softer landing in 2023 and ultimately avoid slipping into recession.

Also, the U.S. GDP grew 2.9% in the fourth quarter for the second consecutive quarter. Besides, the Fed increased interest rates by 25 basis points in February after increasing them by 50 basis points in December.

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InterContinental Hotels Seeks to Dismiss Franchisee Lawsuit Over Cyberattack

InterContinental Hotels

Group PLC is seeking to fend off claims from franchisees five months after a cyberattack that hotel owners say cost them money and disrupted business.

Lawyers for IHG, which owns Holiday Inn, InterContinental Hotels and 16 other brands around the world, have asked a judge to dismiss a lawsuit filed by owners of franchised hotels, arguing their contracts prevent them from seeking damages. The cyberattack didn’t result in personal data being exposed and claims based on alleged failure to protect information shouldn’t apply, IHG’s lawyers said in court papers.

IHG said on Sept. 6 that it detected unauthorized activity on its technology systems and sent an email to franchisees informing them the company’s online reservation technology would be down. Hotel owners said the system was down for a few weeks after the attack, disrupting bookings and forcing staff to use workarounds to find reservations and charge guests for rooms.

“We had major issues where people were not able to book, bookings were really bad, revenue had dropped, customer scores were really bad because everyone was complaining,” said Rich Gandhi, who owns a Holiday Inn Express in Pennsylvania and other IHG properties. 

Hotel owners sued IHG in September in U.S. District Court in Atlanta, accusing the company of failing to “adequately invest in data security, despite the growing number of well-publicized data breaches affecting the hospitality and similar industries.” The owners say they haven’t received sufficient information from IHG about the cyberattack, such as how it happened and whether they will be reimbursed for lost business

A spokeswoman for IHG declined to comment on the lawsuit and said the company is “continuing to support our hotels and owners.”

Consumers often

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