U.S. Consumer Stocks Draw Fans as Oil Sinks

After a sharp decline in oil prices, investors are looking to consumer-focused stocks to improve United States household finances. Big-box stores, low-price restaurants and auto-parts companies were big beneficiaries in this fall's energy-price plunge.

These firms stand to gain the most because of the low-wage earners who spend more of each paycheck than wealthier Americans on filling up. As gas prices drop, those extra funds are likely to quickly be spent on household goods and other necessities.

Shares of big-box giant Target Corp. gained 18 percent this quarter. O'Reilly Automotive Inc. is up 25 percent, while CostCo Wholesale Corp. added 14 percent. The recent declines in gas prices should put at least an extra $40 billion in U.S. consumers' pockets this fourth quarter, according to a report from Morgan Stanley. This figure would give $42 per person each month, based on population estimates from the U.S. Census Bureau.

However, falling gas prices come at a cost. Stocks of many retailers are trading at a higher value than broad market indexes meaning further gains could be limited. Aside from higher valuations, consumers are still pinched by soft wage gains, and many have yet to find full-time work as well. 

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Nick Banks

Nick created Front Street Commercial Real Estate Group in 2002 and spent the first eight years developing and acquiring office and retail projects in South Florida as well as North Central Florida. In 2010 the focus of the firm was shifted to primarily serve third party clients and perform brokerage, property management and mortgage banking functions. Nick has personally developed and acquired nearly 200,000 square feet of office and retail properties in markets throughout Florida. Prior to founding Front Street, Nick was the Director of Finance and Dispositions for Stiles Corporation in Fort Lauderdale where he financed and sold over $500 million in commercial real estate. Before joining Stiles, Nick was an Associate Director at GE Capital Real Estate where he sourced over $200 million in financing throughout Florida. Nick is a graduate of the University of Florida with a degree in Finance and a concentration in Real Estate. He serves as a board member and current vice-chair for the United Way of North Central Florida where he also chairs the Development Committee. Nick is actively involved with the Gainesville Area Chamber of Commerce where he serves as a board member and committee member for the Council for Economic Outreach. He is also a recent graduate of Leadership Gainesville which is a year long leadership program hosted by the Chamber. He is a member of Grace United Methodist Church where he has served as finance chair and as a member of the leadership council. Nick serves as an advisory board member of the University of Florida Bergstrom Center for Real Estate Studies. Nick was recently named chair of the Gainesville committee for the North Florida chapter of Urban Land Institute (ULI). He is a licensed real estate broker in the State of Florida and is a long time member of the International Council of Shopping Centers.

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