Why RH Stock Slumped in October

Luxury home furnishings company RH (NYSE: RH) stock fell 12.4% in October, according to data from S&P Global Market Intelligence. The move marks a snapback in sentiment after a very strong September for the stock. The sell-off in RH's stock comes in line with the 2.8% decline in the S&P 500 and represents the market's sense of caution around the question of what's next after the economic recovery in the third quarter.

RH is seen as emblematic of this question because it's a luxury product company relying on consumer discretionary spending on the home. It's seen as something susceptible to a slowing economy when consumers are feeling financially constrained. On the flip side, companies like RH can do very well in an economic upturn.

RH is hoping spending on high-end homes continues to remain strong. Image source: Getty Images.

Source Fool.com