Despite inflation and high interest rates, U.S. consumer spending remained robust in 2024, fueling growth in the consumer discretionary sector, which outperformed the S&P 500. Solid economic growth and resilient demand drove this momentum. Likewise, in 2025, falling interest rates are likely to boost big-ticket spending on homes and autos, making the consumer discretionary sector promising.
Hence, investors should consider undervalued consumer discretionary stocks like LKQ Corporation (LKQ), Mohawk Industries, Inc. (MHK), and BorgWarner Inc. (BWA) as stealth value plays.
