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ETFs & Stocks to Win on Uptick in June Retail Sales

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Retail sales in the United States jumped 1% sequentially in June of 2022, beating forecasts of a 0.8% gain, and rebounding from a downwardly revised 0.1% decline in May. Sales at gasoline stations recorded the biggest increase (3.6%), followed by sales at non-store retailers (2.2%); miscellaneous store retailers (1.4%); furniture stores (1.4%); food services and drinking places (1%); motor vehicle and parts dealers (0.8%); and sporting goods, hobby, musical and book stores (0.8%).

Barring automobiles, gasoline, building materials and food services, core retail sales advanced 0.8% in June, after a 0.3% fall in May. Year-on-year, retail sales increased 8.4%. Consumer spending makes up about 70% of U.S. economic activity. Thus, any gain in it will likely brighten the economic growth picture.

Below we highlight a few areas and the related ETFs & stocks that may benefit handsomely.

Winning Areas

Non-Store Retailers

Sales of this category rose 2.2% sequentially. Year over year, sales were up 9.6%. Consumers’ interest in buying products online kept the demand high for the segment.

ProShares Online Retail ETF (ONLN - Free Report) is a good bet to tap the winning trend of non-store retailers. The underlying ProShares Online Retail Index is a specialized retail index, tracking retailers that principally sell online or through other non-store channels.

For a single-stock selection, (AMZN - Free Report) appears as a good pick. It is one of the largest e-commerce providers, with sprawling operations spreading across the globe.

Miscellaneous Store Retailers

Sales grew 1.4% sequentially in June and 15.1% year over year. If job data remains stable, consumers may continue to splurge on activities. Moreover, even if the U.S. economy is likely to slip into a recession in the second quarter, necessary buying from consumers should remain in fine fettle.

Consumer Discretionary Select Sector SPDR ETF (XLY - Free Report) thus looks to be a great pick. The underlying Consumer Discretionary Select Sector Index of the fund seeks to provide an effective representation of the consumer discretionary sector of the S&P 500 Index.

Macy's (M - Free Report) is an omnichannel retail organization operating stores, websites and mobile applications under three brands Macy's, Bloomingdale's and bluemercury.

Food Services & Drinking Places

Sales of this category gained 1% sequentially in June and 13.4% year over year.

AdvisorShares Restaurant ETF (EATZ - Free Report) is a pureplay restaurant ETF. This ETF is active and does not track a benchmark.

Yum Brands (YUM) had spun off from PepsiCo. YUM Brands is the global leader in multi-branding and offers consumers more choice and convenience at one outlet.

Motor Vehicle & Parts Dealers

Sales of this category gained 0.8% sequentially in June but remained flat year over year.

First Trust SNetwork Future Vehicles & Technology ETF (CARZ - Free Report) follows the S-Network Electric & Future Vehicle Ecosystem Index constituents are chosen by selecting the eligible Pure-Play companies in descending order of float-adjusted market capitalization until 100 constituents have been selected.

AutoZone Inc. (AZO - Free Report) is one of the leading specialty retailers and distributor of automotive replacement parts and accessories in the United States.

Food & Beverage Stores

Sales of this category gained 0.4% sequentially in June but gained 7.1% year over year.

Invesco Dynamic Food & Beverage ETF (PBJ - Free Report) is comprised of stocks of 30 U.S. food and beverage companies.

Sanderson Farms is a poultry processing company that produces, processes, markets and distributes fresh and frozen chicken products.

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