3 Bull Market Buys That Can Help You Become a Millionaire

There’s really no wrong time to own quality stocks. But let’s face reality. Some stocks perform better in upbeat environments. In fact, many stocks appear to thrive on the economic forces that drive bull markets.

Let’s take a closer look at three names that could prove particularly profitable now that the economy is picking up steam and a new bull market is underway.

home depot

The hardware and home improvement space is doubly tricky to figure out right now. As funds become tighter, consumers are prioritizing purchases like groceries and gasoline at the expense of discretionary goods and services. These dynamics are also having a negative impact on demand for home construction despite the country’s housing shortage.

That is why home depot (HD -2.15%) Overall sales fell 3% during the quarter that ended in October. Same-store sales in the U.S. fell 3.5%. The quarter that ended last month is not expected to be any better either.

But take a step back and look at the bigger picture. Both of these headwinds are cyclical. In fact, the bear cycle may be closer to a reversal than you think. Recent changes in housebuilder confidence levels provide evidence.

The builder does not deny that business has suffered over the past year as rising interest rates have hampered projects. However, NAHB/wells fargo The housing market index (HMI) jumped significantly from November to January in line with the easing of mortgage interest rates, reaching its last peak in the middle of last year.

“We expect single-family home starts to increase in 2024, adding much-needed inventory to the market,” said Alicia Huey, president of the National Association of Home Builders. Given that about half of Home Depot’s business comes from specialty contractors, even a modest homebuilding tailwind is a big deal for the company.

Consumers are also feeling better about their economic situation. The Conference Board’s consumer confidence index for January improved from the last reading at the end of 2021. Retail sales in the U.S. also continue to rise, another indication that people are becoming more comfortable.

This spending is sure to help the home improvement name in the near future as home improvement projects that were put off last year finally make it onto homeowners’ to-do lists.

carnival

No one was really surprised when demand for ocean cruises exploded in 2022. The COVID-19 pandemic has kept the entire world locked inside their homes for a year and a half. When leisure travel finally became possible again, enthusiasts jumped at the chance. This phenomenon has even earned the name “revenge trip.”

cruise line Carnival Corporation (CCL -2.39%) He was a clear beneficiary of this trend. But now things appear to be calming down, with some experts suggesting last year’s travel craze may be too much of an act to follow or even match this year. And maybe it will. But data so far shows travel demand is still growing.

Let’s take the International Air Transport Association’s 2024 forecast as an example. Based on trends already seen at the end of last year, the organization expects air travel revenue to grow by 7.6%. Total passenger trips are expected to reach 4.7 billion, surpassing the pre-pandemic figure of 4.5 billion in 2019.

And people don’t just get on planes to get from point A to point B. Average hotel occupancy rates in the U.S. improved from 62.7% in 2022 to 63% in 2023, with revenue per room growing at a similar pace, according to hotel consulting firm HVS. . HVS expects occupancy rates to rise to 63.4% this year, pushing rates per room higher again.

Even Carnival itself is still seeing a surprising increase in demand. Last quarter, sales hit a record fourth quarter of $5.4 billion, while deposits for future voyages hit a fourth quarter record of $6.4 billion. The company reported that nearly two-thirds of this year’s production capacity has already been booked.

What is the biggest problem with Carnival right now? There are not enough ships to fully meet demand. As long as the bull market and underlying economic forces persist, demand will almost certainly continue to grow.

Nike

Lastly, add sneaker companies. Nike (no -2.03%) Add these to your list of bull market purchases that could help you become a millionaire. Things haven’t been easy for popular sportswear brands these days. Last quarter’s revenue was essentially flat year-over-year, flat due to weakness in the all-important North American market.

The company also lowered its sales outlook for the full fiscal year ending in May. Nike is currently targeting revenue growth of around 1%, which CFO Matthew Friend explained is the result of a number of factors, including increasing macro headwinds in Greater China and a stronger U.S. dollar, among others.

It would also be naive to ignore the emergence of competing shoe brands such as: To holdings and DeckersOwned by Hoka. Now, it’s not that shocking to see Nike stock suddenly weak after its late-2021 highs.

But all the loud headlines these days are missing an important detail. That said, this is still Nike. It is a leader in sportswear and a dominant name in sneakers. This is an established name that everyone knows, a brand that almost everyone respects, even if they are not regular buyers of its products.

Brand consulting firm Interbrand actually ranked Nike as the 9th best global brand of 2023, based on a variety of factors, including “the role these valuable brands play in shaping culture and the world at large.” It’s certainly hard to argue that Nike isn’t a permanent fixture of the world’s cultural landscape.

And this is important. Although these challenges are expected to persist over the next few quarters, Nike still has a strong brand name behind it. It is also spacious. Both are reasons to expect great results from new innovations and streamlined initiatives implemented in early 2024.

Expect this work to start making a difference in the second half of this year, when the new bull market is well-established and the economy could really take off. But don’t be surprised to see the stock start making consistent profits even before then.