Here is where consumers are spending their $1,400 stimulus checks — and which stocks are likely to benefit

Published Wed, Mar 17 202112:24 PM EDTUpdated Wed, Mar 17 20211:00 PM EDT

Patti Domm @in/patti-domm-9224884/@pattidomm

Stimulus checks may go into savings accounts or the stock market, but they also are likely to go shopping — boosting retailers' March sales. Individuals have begun to receive the latest round of $1,400 checks . For a family of four, that one-time payment could be as high as $5,600. Since earlier this month, some retail stocks have made gains as investors game where the cash may end up. The case for retailers can be made simply by looking at where the last round of checks were spent. In early January, individuals received just $600. Fresh government spending data for January, released this week, shows a much bigger pop in overall retail sales than previously reported. January sales were revised higher to show a 7.6% gain in data released Wednesday by the Census Bureau, up from an initial report of 5.3%. February sales fell by 3% in payback for the big surge, but some of that was also likely to be the result of unusually severe winter weather that hit Texas and other parts of the South last month. "The support to spending from the $600 stimulus checks, which went out in early January, is now even more apparent," wrote JPMorgan chief U.S. economist Michael Feroli. "And it looks like much of the stimulus boost in January benefited retailers of discretionary products, with double-digit percentage gains that month for sellers of furniture, electronics, and sporting goods." In January, furniture sales were up 12.9%, while electronics and appliances gained 16.7%, Feroli said. Sporting goods sales rose 10.3% and general merchandise was up 10.4%, he noted. Sales at nonstore retailers like Amazon were up 16.8%. "Given that the $1,400 ARP stimulus checks will start going out [Thursday], it's likely we will see an even bigger boost to consumer spending in coming months, starting with March," Feroli added, referring to the the American Rescue Plan, the formal name of the stimulus bill. Home furnishings and other retailers Art Hogan, chief market strategist at National Securities, said a whole group of retail stocks stand to benefit, and they have been moving in part on expectations of a spending spree. "The positive reaction that we saw from the blockbuster January retail sales report shows us where the consumer spending is going," he said. "Everything is in the home. It's furniture, appliances, consumer electronics," he said. "All things that speak to improving the home situation." Home goods and furniture retailers like Williams-Sonoma, La-Z-Boy and Wayfair stand to gain, as do smaller companies like Ethan Allen, Haverty Furniture and Basset Furniture. Hogan points out that some retailers have already had a big run, like Williams-Sonoma, a winner in the stay-at-home and reopening trade. The stock is up nearly 300% over the past year and 35% this year. He said retail stocks have run up since earlier this month, but gave back some gains Wednesday because of weaker-than-expected housing data. Housing starts fell 10.3% in February. A diverse group of retail outlets could all gain, from Bed Bath and Beyond , Kohl's and Macy's t o Five Below, Dollar General and Dollar Tree. Consumers are likely to tap Amazon even for some of bigger ticket goods, and Etsy could see some pickup in sales. Hogan said used car sales may get a boost, so Carvana c ould benefit. Others that stand to benefit include Best Buy, Costco, BJ's Wholesale Club , Home Depot and Lowe's, all stores where consumers shop for appliances or electronics. Target and Walmart should also see some of that cash. Hogan said consumer tech giant Apple could see some increase in demand for its products. He cited three factors that will ultimately bolster spending. "The jobs market improved and will continue to improve as we reopen," said Hogan. "Stimulus has helped in the past and will help in the future as they roll it out this week and next." "And the third thing I think is there is a tremendous amount of pent-up demand for goods and services." Correction: An earlier version had the wrong day that some retail stocks gave back gains. It was Wednesday.

A shopper wearing a protective mask looks at a television for sale inside a Costco store in San Francisco, California, on Wednesday, March 3, 2021.

David Paul Morris | Bloomberg | Getty Images

Stimulus checks may go into savings accounts or the stock market, but they also are likely to go shopping — boosting retailers' March sales.

Individuals have begun to receive the latest round of $1,400 checks. For a family of four, that one-time payment could be as high as $5,600.

Since earlier this month, some retail stocks have made gains as investors game where the cash may end up.

The case for retailers can be made simply by looking at where the last round of checks were spent.

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