We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Retail sales in the United States increased 0.6% sequentially in August 2020, following a downwardly revised 0.9% rise in July and compared to the forecast of a 1% uptick as unemployment benefits were reduced and support for small businesses ended.
Core retail sales, which exclude automobiles, gasoline, building materials and food services, dropped 0.1% last month after a downwardly revised 0.9% increase in July. Economists polled by Reuters had forecast core retail sales gaining 0.5% in August, as quoted on CNBC.
In short, U.S. retail sales grew in August for three successive months, but the momentum is slowing. Consumer spending makes up about 70% of U.S. economic activity. Thus, any jump or slowdown in it will make or break the economic growth picture. Against this wavering backdrop, below we highlight a few areas and the related ETFs that stayed afloat.
Restaurants
Sales in food services and drinking places saw an increase of 4.7% in August but were still 15.4% down year over year. A few restaurant stocks have exposure to Invesco Dynamic Leisure and Entertainment ETF (PEJ - Free Report) , so the fund stands to benefit.
As far as stocks are concerned, investors can bet on Zacks Rank #1 (Strong Buy) Brinker International Inc. (EAT - Free Report) and Zacks Rank #2 (Buy) Darden Restaurants Inc. (DRI).
Clothing
Many mall-based clothing stores were closed amid lockdowns. So, pent-up demand has been boosting spending in this segment. Apparel and accessories’ sales gained 2.9% in the month, after recording solid gains in previous months. However, sales were still 20.4% lower than August 2019.
Apparel Retail takes about 14% of the fund SPDR S&P Retail ETF (XRT - Free Report) . Also, much of the focus of XRT shifted toward online stores lately, ensuring its smooth ride ahead.
For single-stock selection, Zacks Rank #1 Sportsmans Warehouse Holdings Inc. (SPWH - Free Report) and Zumiez Inc. (ZUMZ) appear as nice bets.
Furniture and Home Furnishing Stores
Furniture sales increased 2.1% sequentially. Year over year, sales were also up 3.8%. Home furnishing company Home Depot (HD - Free Report) has considerable exposure to Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) and VanEck Vectors Retail ETF (RTH). So, these ETFs should win following the release of retail sales. Investors can also bet on Zacks Rank #1 stocks like RH (RH) and WilliamsSonoma Inc. (WSM).
Electronics and Appliances
Sales of this category nudged up 0.8% sequentially. Year over year, sales were down only 2.4%. Consumers’ interest in buying electronics products should keep demand for semiconductors higher and put VanEck Vectors Semiconductor ETF (SMH - Free Report) in a better position.
On the equity front, Zacks Rank #1 Best Buy Company Inc. (BBY - Free Report) appears a good bet. Best Buy is a multinational specialty retailer of consumer electronics, home office products, entertainment software, communication, food preparation, wellness, heath, security, appliances and related services.
Health & Personal Care Stores
This segment saw an uptick in sales by 0.8%. Moreover, the segment’s sales were 5.6% higher year over year. Such trends should bode well for all retail and consumer staples ETFs like Consumer Staples Select Sector SPDR Fund (XLP - Free Report) . In this regard, investors can place a bet on ColgatePalmolive Company (CL - Free Report) , which has a Zacks Rank #3 (Hold).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
5 Industry ETFs Set to Beat Slowing Retail Sales
Retail sales in the United States increased 0.6% sequentially in August 2020, following a downwardly revised 0.9% rise in July and compared to the forecast of a 1% uptick as unemployment benefits were reduced and support for small businesses ended.
Core retail sales, which exclude automobiles, gasoline, building materials and food services, dropped 0.1% last month after a downwardly revised 0.9% increase in July. Economists polled by Reuters had forecast core retail sales gaining 0.5% in August, as quoted on CNBC.
In short, U.S. retail sales grew in August for three successive months, but the momentum is slowing. Consumer spending makes up about 70% of U.S. economic activity. Thus, any jump or slowdown in it will make or break the economic growth picture. Against this wavering backdrop, below we highlight a few areas and the related ETFs that stayed afloat.
Restaurants
Sales in food services and drinking places saw an increase of 4.7% in August but were still 15.4% down year over year. A few restaurant stocks have exposure to Invesco Dynamic Leisure and Entertainment ETF (PEJ - Free Report) , so the fund stands to benefit.
As far as stocks are concerned, investors can bet on Zacks Rank #1 (Strong Buy) Brinker International Inc. (EAT - Free Report) and Zacks Rank #2 (Buy) Darden Restaurants Inc. (DRI).
Clothing
Many mall-based clothing stores were closed amid lockdowns. So, pent-up demand has been boosting spending in this segment. Apparel and accessories’ sales gained 2.9% in the month, after recording solid gains in previous months. However, sales were still 20.4% lower than August 2019.
Apparel Retail takes about 14% of the fund SPDR S&P Retail ETF (XRT - Free Report) . Also, much of the focus of XRT shifted toward online stores lately, ensuring its smooth ride ahead.
For single-stock selection, Zacks Rank #1 Sportsmans Warehouse Holdings Inc. (SPWH - Free Report) and Zumiez Inc. (ZUMZ) appear as nice bets.
Furniture and Home Furnishing Stores
Furniture sales increased 2.1% sequentially. Year over year, sales were also up 3.8%. Home furnishing company Home Depot (HD - Free Report) has considerable exposure to Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) and VanEck Vectors Retail ETF (RTH). So, these ETFs should win following the release of retail sales. Investors can also bet on Zacks Rank #1 stocks like RH (RH) and WilliamsSonoma Inc. (WSM).
Electronics and Appliances
Sales of this category nudged up 0.8% sequentially. Year over year, sales were down only 2.4%. Consumers’ interest in buying electronics products should keep demand for semiconductors higher and put VanEck Vectors Semiconductor ETF (SMH - Free Report) in a better position.
On the equity front, Zacks Rank #1 Best Buy Company Inc. (BBY - Free Report) appears a good bet. Best Buy is a multinational specialty retailer of consumer electronics, home office products, entertainment software, communication, food preparation, wellness, heath, security, appliances and related services.
Health & Personal Care Stores
This segment saw an uptick in sales by 0.8%. Moreover, the segment’s sales were 5.6% higher year over year. Such trends should bode well for all retail and consumer staples ETFs like Consumer Staples Select Sector SPDR Fund (XLP - Free Report) . In this regard, investors can place a bet on ColgatePalmolive Company (CL - Free Report) , which has a Zacks Rank #3 (Hold).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>