Several companies in the consumer discretionary sector just reported robust quarterly earnings. 

More importantly (for forward-looking markets), they raised their outlooks. It appears their customers are exhibiting animal spirits, and this rides the wave of MAGA optimism cascading over our country.  

We’ve heard about the Trump bump in the stock market, and in the near-parabolic crypto rise, especially that of Bitcoin, which is up about forty percent since his republic-saving election. 

One measure which captures our collective level of animal spirits is the widely watched Consumer Sentiment Index from the University of Michigan.  It reflects perceptions of economic conditions, and was vibrant in the post-election period.

Clearly, markets are anticipating less regulation, fewer taxes, fewer fines, less DEI, less ESG, less bureaucracy, less judicial interference, and fewer restrictions on corporate buybacks.  Conversely, they are expecting more drilling, more American manufacturing, more DOGE, more crypto, more mergers, more corporate profits and more animal spirits. 

It doesn’t take a stock market guru to identify companies in sectors that stand to benefit under Trump’s pro-American business policies.  Nor to isolate those who may have to get with the program.  For example, some automakers with production facilities overseas (e.g., Mexico) may need to relocate, drug makers and chip manufacturers will be encouraged to onshore, and some so-called “clean” energy companies must become less reliant on socialistic industrial policy.

All those business contingencies have been telegraphed, but there’re a few off-radar business cases that may be riding the wave of MAGA euphoria.  Specifically, the Trump Dance, along with the uplifting sense of élan vital, may be benefiting Lululemon Athletica, Ulta Beauty, and Victoria Secret.

Lululemon is a maker of yoga pants, dance outfits, and some suggestive fitness attire (so I’m told).  The company just reported robust quarterly earnings, and raised their fiscal-year outlook.  Management said they are “pleased” with the start to its holiday season.  Pleased indeed – their customers might be inspired to bust a Trump Dance in their athletic apparel.  

Ulta Beauty execs are also pleased with themselves, having just raised their full-year outlook.  The beauty retailer reported “improved sales trends.” Why not?  There’s a renewed spirit of American vitality pervading America the Beautiful, and many of those rejoicing are keen to upgrade their appearance.  Go for it!

After reporting skimpy numbers for years, Victoria's Secret also just boosted their sales outlook.  Perhaps their vivacious customers want to show-off a bit as they dance in the boudoir before a nightcap?  And then again to start their day to “YMCA” as Morning Again in America dawns upon them.  

For sure, Trump’s electoral landslide can’t take direct credit for those company’s recent upswings, but the encouraging sales outlooks from nonessential vanity stocks dovetails with a pervasive sense of optimism – we escaped the Grim-Reaper-in-Chief’s winter of death  (and spring, summer and fall).

Their business models may not be considered bellwethers for our overall economic trajectory.  Nor are they absolutely critical to our economic development, technological transformations, energy harnessing, or infrastructure upgrades.  Nevertheless, the performance of these consumer discretionary stocks reflects the return of American pride with a healthy touch of fresh brashness.  

Companies are selling more yoga pants, dance attire, beauty products, and lingerie. America the beautiful is back.  Due to the non-discretionary MAGA movement, our animal spirits are frolicking from sea to shining sea.

Image: PxHere // CCO public domain