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Will ETFs Gain as US Consumer Confidence Improves in March?
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The strong labor market and recovering U.S. economy have boosted the positive market sentiments as consumer confidence improved in March after declining for the first two months of 2022. The Conference Board's measure of consumer confidence index stands at 107.2 in March 2022 versus 105.7 in February. Moreover, March’s reading nominally surpassed the consensus estimate of 107, per a Bloomberg survey of economists. However, the metric continues to be below the pre-pandemic level of 132.6 achieved in February 2020.
The Present Situation Index, which gauges consumer views on current business and labor market conditions, surged to 153 in March from 143 last month. The Expectations Index, which measures consumers’ short-term (for the next six months) outlook for income, business and labor market conditions, decreased to 76.6 from 80.8.
The disappointing consumer confidence reading might affect the consumer discretionary sector, which attracts a major portion of consumer spending amid rising inflation levels. Certain ETFs that can feel the impact are The Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Vanguard Consumer Discretionary ETF (VCR - Free Report) , First Trust Consumer Discretionary AlphaDEX Fund (FXD - Free Report) and Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) .
Commenting on the data, Lynn Franco, Senior Director of Economic Indicators at The Conference Board, reportedly said, “Consumer confidence was up slightly in March after declines in February and January. The Present Situation Index rose substantially, suggesting economic growth continued into late Q1. Expectations, on the other hand, weakened further with consumers citing rising prices, especially at the gas pump, and the war in Ukraine as factors. Meanwhile, purchasing intentions for big-ticket items like automobiles have softened somewhat over the past few months as expectations for interest rates have risen.”
Market experts believe that high inflation levels and geopolitical tensions may dampen consumer confidence in the near term and result in a slowdown in spending power.
Going on, the dual forces constituting the Russia-Ukraine conflict and the surging inflationary levels are weakening the U.S. consumer sentiment levels. The rising commodity prices due to the war crisis are increasing consumers' struggles. The latest disappointing consumer sentiment final reading for March slipped to the lowest level in about 10 years, highlighting the same.
The University of Michigan’s consumer sentiment index dropped to 59.4 in March from the preliminary reading of 59.7 issued earlier in the month. The metric lagged the economists’ expectations, who estimated it to remain unchanged, per a Bloomberg’s survey.
ETFs to Keep a Track On
Here we discuss in detail the four most popular funds that target the broader consumer discretionary sector (see all Consumer Discretionary ETFs):
The Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
The Consumer Discretionary Select Sector SPDR Fund is the largest and the most popular product in the consumer discretionary space, with AUM of $19.97 billion. XLY tracks the Consumer Discretionary Select Sector Index.
The Consumer Discretionary Select Sector SPDR Fund charges an expense ratio of 0.10%. XLY carries a Zacks ETF Rank #2 (Buy), with a Medium-risk outlook. Also, The Consumer Discretionary Select Sector SPDR Fund trades in a three-month average volume of 11.8 million shares (read: 5 ETF Areas Shining Bright as US Economy Looks Strong).
Vanguard Consumer Discretionary ETF currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index.
Vanguard Consumer Discretionary ETF has AUM of $6.24 billion and charges an expense ratio of 0.10%. VCR carries a Zacks ETF Rank #2, with a Medium-risk outlook. Also, Vanguard Consumer Discretionary ETF trades in a three-month average volume of about 176,000 shares (read: ETFs to Win & Lose on the Likely First Rate-Hike Since 2008).
First Trust Consumer Discretionary AlphaDEX Fund (FXD - Free Report)
First Trust Consumer Discretionary AlphaDEX Fund tracks the StrataQuant Consumer Discretionary Index, which employs the AlphaDEX stock-selection methodology to select stocks from the Russell 1000 Index.
First Trust Consumer Discretionary AlphaDEX Fund has an AUM of $1.60 billion. FXD charges 0.61% of annual fees and has a Zacks ETF Rank #3 (Hold), with a Medium-risk outlook. Also, First Trust Consumer Discretionary AlphaDEX Fund trades in a three-month average volume of about 287,000 shares.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
Fidelity MSCI Consumer Discretionary Index ETF tracks the MSCI USA IMI Consumer Discretionary Index.
Fidelity MSCI Consumer Discretionary Index ETF amassed $1.49 billion in its asset base. FDIS charges 8 basis points as annual fees from investors and carries a Zacks ETF Rank #2, with a Medium-risk outlook. Fidelity MSCI Consumer Discretionary Index ETF trades in a three-month average volume of about 204,000 shares.
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Will ETFs Gain as US Consumer Confidence Improves in March?
The strong labor market and recovering U.S. economy have boosted the positive market sentiments as consumer confidence improved in March after declining for the first two months of 2022. The Conference Board's measure of consumer confidence index stands at 107.2 in March 2022 versus 105.7 in February. Moreover, March’s reading nominally surpassed the consensus estimate of 107, per a Bloomberg survey of economists. However, the metric continues to be below the pre-pandemic level of 132.6 achieved in February 2020.
The Present Situation Index, which gauges consumer views on current business and labor market conditions, surged to 153 in March from 143 last month. The Expectations Index, which measures consumers’ short-term (for the next six months) outlook for income, business and labor market conditions, decreased to 76.6 from 80.8.
The disappointing consumer confidence reading might affect the consumer discretionary sector, which attracts a major portion of consumer spending amid rising inflation levels. Certain ETFs that can feel the impact are The Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) , Vanguard Consumer Discretionary ETF (VCR - Free Report) , First Trust Consumer Discretionary AlphaDEX Fund (FXD - Free Report) and Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report) .
Commenting on the data, Lynn Franco, Senior Director of Economic Indicators at The Conference Board, reportedly said, “Consumer confidence was up slightly in March after declines in February and January. The Present Situation Index rose substantially, suggesting economic growth continued into late Q1. Expectations, on the other hand, weakened further with consumers citing rising prices, especially at the gas pump, and the war in Ukraine as factors. Meanwhile, purchasing intentions for big-ticket items like automobiles have softened somewhat over the past few months as expectations for interest rates have risen.”
Market experts believe that high inflation levels and geopolitical tensions may dampen consumer confidence in the near term and result in a slowdown in spending power.
Going on, the dual forces constituting the Russia-Ukraine conflict and the surging inflationary levels are weakening the U.S. consumer sentiment levels. The rising commodity prices due to the war crisis are increasing consumers' struggles. The latest disappointing consumer sentiment final reading for March slipped to the lowest level in about 10 years, highlighting the same.
The University of Michigan’s consumer sentiment index dropped to 59.4 in March from the preliminary reading of 59.7 issued earlier in the month. The metric lagged the economists’ expectations, who estimated it to remain unchanged, per a Bloomberg’s survey.
ETFs to Keep a Track On
Here we discuss in detail the four most popular funds that target the broader consumer discretionary sector (see all Consumer Discretionary ETFs):
The Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report)
The Consumer Discretionary Select Sector SPDR Fund is the largest and the most popular product in the consumer discretionary space, with AUM of $19.97 billion. XLY tracks the Consumer Discretionary Select Sector Index.
The Consumer Discretionary Select Sector SPDR Fund charges an expense ratio of 0.10%. XLY carries a Zacks ETF Rank #2 (Buy), with a Medium-risk outlook. Also, The Consumer Discretionary Select Sector SPDR Fund trades in a three-month average volume of 11.8 million shares (read: 5 ETF Areas Shining Bright as US Economy Looks Strong).
Vanguard Consumer Discretionary ETF (VCR - Free Report)
Vanguard Consumer Discretionary ETF currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index.
Vanguard Consumer Discretionary ETF has AUM of $6.24 billion and charges an expense ratio of 0.10%. VCR carries a Zacks ETF Rank #2, with a Medium-risk outlook. Also, Vanguard Consumer Discretionary ETF trades in a three-month average volume of about 176,000 shares (read: ETFs to Win & Lose on the Likely First Rate-Hike Since 2008).
First Trust Consumer Discretionary AlphaDEX Fund (FXD - Free Report)
First Trust Consumer Discretionary AlphaDEX Fund tracks the StrataQuant Consumer Discretionary Index, which employs the AlphaDEX stock-selection methodology to select stocks from the Russell 1000 Index.
First Trust Consumer Discretionary AlphaDEX Fund has an AUM of $1.60 billion. FXD charges 0.61% of annual fees and has a Zacks ETF Rank #3 (Hold), with a Medium-risk outlook. Also, First Trust Consumer Discretionary AlphaDEX Fund trades in a three-month average volume of about 287,000 shares.
Fidelity MSCI Consumer Discretionary Index ETF (FDIS - Free Report)
Fidelity MSCI Consumer Discretionary Index ETF tracks the MSCI USA IMI Consumer Discretionary Index.
Fidelity MSCI Consumer Discretionary Index ETF amassed $1.49 billion in its asset base. FDIS charges 8 basis points as annual fees from investors and carries a Zacks ETF Rank #2, with a Medium-risk outlook. Fidelity MSCI Consumer Discretionary Index ETF trades in a three-month average volume of about 204,000 shares.