A customer holds an American Eagle Outfitters Inc. shopping bag while waiting in line to make a transaction at a store in San Francisco, California, U.S., on Wednesday, March 6, 2013.
An influx of cash to many low-to-moderate-income households as part of the $1.9 trillion Covid-19 relief package is expected to lift several consumer stocks over the next few months, according to Cowen.
The brokerage believes that stimulus checks and a dramatic expansion of the child tax credit will flow through the U.S. economy and fuel business at a wide range of industries from airlines and hospitality to apparel retail and cannabis.
“We see evidence of increased consumer spending, namely driven by incremental $1,400 stimulus checks,” a team of Cowen analysts wrote Friday. “Across consumer industries, these indicators of pent-up demand should translate into near-term spending (particularly among households most impacted by COVID-19) and providing another leg of growth.”