HIGH POINT — The recent stock market free fall, which saw the S&P head into bear market territory on Monday, has pulled furniture industry stocks into the maelstrom with virtually all seeing declines this week. A Bear Market is defined as a 20% decline in public equity markets since their most recent all time high. As of Monday, June 13, the S&P had declined 21% from its previous high.
The latest declines, coming amid concerns that recent Federal Reserve action to raise interest rates and slow inflation will push the country into recession, have been driven by substantial declines in major tech stocks. Amazon was off 39% Monday, Alphabet (Google) was off 27%, and Tesla has dropped more than 40% of its value since the start of the year.
By comparison, the furniture industry fared reasonably well, with most daily and percentage declines in the single digits. This is despite recent declines in consumer demand slowing retail orders significantly and leaving many home furnishings retailers and manufacturers in a position of holding excess inventory.
Recent moves by the Federal Reserve to raise interest rates and further slow consumer demand could hit the furniture industry with a one-two punch of declining demand and higher interest rates.
While an increase in the federal funds rate does not directly impact consumer lending, it most often results in rising credit card rates and more difficult access to credit; a critical driver of furniture sales.
Here’s a quick capsule of key how home furnishings stock were impacted this week.
- Amazon down 3.72% yesterday, down 8.47% past 5 days
- Bassett, down 1.09% yesterday, down 4.77% last 5 days
- Big Lots, down 4.67% yesterday, down 9.99% last 5 days
- Conn’s, down 8% yesterday, down 19.08% last 5 days
- Culp down 2.11% yesterday, down 7.27% last 5 days
- Ethan Allen, down 3.42% yesterday, down 9.59% last 5 days
- Flexsteel down 7.7% yesterday, down 13.70% last 5 days
- Haverty’s down 6.14% yesterday, down 8.64% last 5 days
- Hooker stock down 3.27% yesterday, down 15% in the last 5 days
- La-Z-Boy, down 6.9% yesterday, 9.59% last 5 days
- Leggett & Platt, down 4.9% yesterday, 12.52% last 5 days
- Manwah Holdings down 1.25% yesterday, 4.55% last five days
- Overstock down 8.43% yesterday, down 6.6% last 5 days
- RH down 7.46% yesterday, 17.49% last 5 days
- Sleep Number down 9.12% yesterday, down 15.67% last 5 days
- Tempur Sealy down 9.98% yesterday, down 12.57% last 5 days
- TJX down 1.54% yesterday, down 4.46% last 5 days
- Wayfair down 9.11% yesterday, down 15.85% last 5 days
- Williams-Sonoma down 4.65% yesterday, 6.85% last five days