Why is the Temple and Webster share price up 7% today?

A woman and two children leap up and over a sofa.A woman and two children leap up and over a sofa.

The Temple & Webster Group Ltd (ASX: TPW) share price is soaring in early afternoon trading on Thursday.

At the time of writing, the company’s shares are pushing 7.02% higher to $3.81 apiece. This comes despite no news out of the online furniture retailer.

In broad market moves, the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) is up 0.75%, while the All Ordinaries Index (ASX: XAO) is 0.06% higher.

What’s up with the Temple and Webster share price?

Investors have been constructive on consumer cyclical shares since mid-June with the consumer discretionary benchmark up 10% in a month. Similarly, the Temple and Webster shares are up 8% over the same period.

Despite softening consumer sentiment out of the US and Australia recently, consumer spending habits likely jumped in FY22, Focus Economics posits.

A combination of accumulated savings and a tight labour market points to strengths in consumer demand, it says.

As a result, the Australian economy looks set to continue growing, and the above points “should feed household spending”, it remarked.

Furthermore, the consumer discretionary sector continues to catch bids in July. The reversal from previous lows looks to have inflected positively on the Temple and Webster share price.

It, too, has reverted course and bounced from 52-week lows of $2.97 on 12 July, as seen below.

TradingView Chart

As seen in the chart, the two instruments have tracked each other in a strikingly similar fashion over the past 12 months.

In that time, the Temple and Webster share price has fallen 66%. It is also down 64% this year to date.

The post Why is the Temple and Webster share price up 7% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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