Netflix, other consumer stocks aim to end year on

Netflix, other consumer stocks aim to end year on top
Week ahead: Durable goods orders, new home sales, slew of Japan data
NEW YORK (MarketWatch) — Stock market plays on consumer spending will work on finishing the year on top in the week ahead, and some analysts expect the consumer-discretionary sector will continue to outperform in 2014.

Meanwhile, the holiday-shortened week isn’t expected to offer a lot in terms of earnings reports, trading volume or U.S. economic data, but stimulus-driven Japan will provide plenty for U.S. investors to unwrap on the day after Christmas.

Consumer discretionary is the best performer among the S&P 500’s 10 sectors this year, up 38.4% as of Friday’s close. It’s been boosted by stock in Netflix Inc. (NASDAQ:NFLX) , which has more than quadrupled in 2014 to lead the S&P 500, as well as turnaround story Best Buy Co. (NYSE:BBY) , which has more than tripled, and Tripadvisor Inc. (NASDAQ:TRIP) , which has roughly doubled. Analysts like the sector’s relatively strong gains in earnings per share.

“We continue to favor the perennially outperforming Consumer Discretionary group, as it is expected again to be an above-market EPS grower while maintaining positive technicals,” said Sam Stovall, chief equity strategist at S&P Capital IQ, in a note on Friday that offered recommendations for the new year.

Consumer data, a bevy of Japanese reports

This week’s few U.S. economic reports could add to the good vibes around the consumer-discretionary sector. A November consumer-spending report and a consumer-sentiment survey are both due Monday, and some analysts expect to get evidence of further improvements, according to a MarketWatch preview story .

The Christmas week also will provide readings on U.S. durable-goods orders and new-home sales on Tuesday, plus a report on weekly jobless claims on Thursday.

In addition, Thursday will bring a bevy of Japanese economic reports, including on unemployment, industrial production, retail sales and inflation. Investors will scour the reports for evidence of how that country’s economic stimulus efforts, dubbed Abenomics, are faring.

“Japan under the Abenomics regime became very interesting,” said Steve Wood, chief market strategist at Russell Investments, adding that the country hadn’t been that interesting to investors for a couple of decades. His firm has a positive view on Japanese equities in 2014, saying there’s headroom for further rises.

ETFs like the iShares MSCI Japan Index Fund (NAR:EWJ) , which is up 21.5% for the year, and the WisdomTree Japan Hedged Equity Fund (NAR XJ) , up 37.2% thanks to its hedging of currency fluctuations, offer exposure to the world’s No. 3 economy. http://www.marketwatch.com/story/netflix-othe...atest_news