These stocks are set to outperform in a 'K-shape' economy, Wolfe Research says

Stocks such as Ralph Lauren and Dollar General have strong upside potential in the current "K-shaped" economy, according to Wolfe Research. While an economy can expand in this scenario, it creates greater bifurcation between consumers and industries in the high and lower ends. With a widening wealth gap, lower-income shoppers tend to pull back from making purchases, while wealthier consumers benefit from rising stock and home prices — and can grow their spending power. Under these conditions, companies catering to higher-end consumers could get a boost, while those on the lower end will gravitate toward businesses offering more discounts and lower prices. Wolfe Research compiled two baskets looking at potential beneficiaries from greater spending among high- and low-end consumers. Stocks i