We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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.
The consumer price index (CPI) rose 3.2% year over year in July, marking the first significant increase in over a year. However, this was slightly below the anticipated 3.3% forecast. On a monthly basis, prices saw a seasonally adjusted increase of 0.2%, aligning with the Dow Jones estimate, as quoted on CNBC.
Barring the volatile sectors of food and energy, the core CPI also rose by 0.2% for the month. This translates to an annual rate of 4.7%, the lowest since October 2021, and slightly below the Dow Jones consensus estimate of 4.8%.
Against this backdrop, below we highlight a few sectors and their ETFs that could gain ahead.
Shelter and Real Estate
The primary driver for the monthly inflation increase was shelter costs, which surged by 0.4% sequentially and are up 7.7% year over year. The Bureau highlighted that over 90% of the inflation increase was attributed to this category, which constitutes about a third of the CPI weighting.
Investors can consider ETFs like the iShares U.S. Real Estate ETF (IYR - Free Report) or the Vanguard Real Estate Index Fund (VNQ - Free Report) to gain exposure to this sector, which is experiencing strong demand and rising prices. Both funds have Zacks Rank #3 (Hold).
Restaurants
The food index increased 0.2% sequentially in July. The food away from home index rose 0.2% sequentially in July but crept up 7.1% year over year. Investors may consider ETFs focused on the restaurant industry, such as AdvisorShares Restaurant ETF (EATZ - Free Report) to capitalize on the trend.
Transportation Services
The index rose 0.3% sequentially and 9% year over year. The data puts focus on SPDR S&P Transportation ETF (XTN - Free Report) . The Zacks Rank #2 (Buy) fund offers exposure Cargo Ground Transportation (31.22%), Passenger Airlines (26.24%), Air Freight & Logistics (17.85%) and Marine (9.34%).
Medical Care Commodities
The index recorded a sequential gain of 0.5% in inflation. Inflation gained 4.1% year over year. The Zacks Rank #2 ETF iShares U.S. Medical Devices ETF (IHI - Free Report) , hence, draws attention. Health Care Equipment (80.34%) takes the top spot in the fund, followed by Life Sciences Tools & Services (19.29%).
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Sector ETFs Likely to Gain on July Inflation Data
The consumer price index (CPI) rose 3.2% year over year in July, marking the first significant increase in over a year. However, this was slightly below the anticipated 3.3% forecast. On a monthly basis, prices saw a seasonally adjusted increase of 0.2%, aligning with the Dow Jones estimate, as quoted on CNBC.
Barring the volatile sectors of food and energy, the core CPI also rose by 0.2% for the month. This translates to an annual rate of 4.7%, the lowest since October 2021, and slightly below the Dow Jones consensus estimate of 4.8%.
Against this backdrop, below we highlight a few sectors and their ETFs that could gain ahead.
Shelter and Real Estate
The primary driver for the monthly inflation increase was shelter costs, which surged by 0.4% sequentially and are up 7.7% year over year. The Bureau highlighted that over 90% of the inflation increase was attributed to this category, which constitutes about a third of the CPI weighting.
Investors can consider ETFs like the iShares U.S. Real Estate ETF (IYR - Free Report) or the Vanguard Real Estate Index Fund (VNQ - Free Report) to gain exposure to this sector, which is experiencing strong demand and rising prices. Both funds have Zacks Rank #3 (Hold).
Restaurants
The food index increased 0.2% sequentially in July. The food away from home index rose 0.2% sequentially in July but crept up 7.1% year over year. Investors may consider ETFs focused on the restaurant industry, such as AdvisorShares Restaurant ETF (EATZ - Free Report) to capitalize on the trend.
Transportation Services
The index rose 0.3% sequentially and 9% year over year. The data puts focus on SPDR S&P Transportation ETF (XTN - Free Report) . The Zacks Rank #2 (Buy) fund offers exposure Cargo Ground Transportation (31.22%), Passenger Airlines (26.24%), Air Freight & Logistics (17.85%) and Marine (9.34%).
Medical Care Commodities
The index recorded a sequential gain of 0.5% in inflation. Inflation gained 4.1% year over year. The Zacks Rank #2 ETF iShares U.S. Medical Devices ETF (IHI - Free Report) , hence, draws attention. Health Care Equipment (80.34%) takes the top spot in the fund, followed by Life Sciences Tools & Services (19.29%).