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.
The U.S. retail sector continues to feel the bounce from hurricanes. Sales increased 0.2% sequentially in October 2017, slightly higher than market expectations of no change and after a upwardly revised 1.9% jump in September. On a year-over-year basis, retail sales rose 4.6% following 4.8% gains recorded in September.
Hurricane Harvey flooded Texas at August-end and Irma demolished Florida in early September. So, purchase of new cars, higher replacement demand and a pickup in economic activity was understandable post hurricanes (read: ETF & Stocks to Buy on Rebounding September Auto Sales).
Out of the 13 key sectors, nine registered expansion last month. Below we recommend a few ETFs & stocks that are likely to be the prime beneficiaries of this retail sales improvement.
Auto
A pickup in sales among auto dealerships was noticeable in October, with a 0.7% increase following a 4.6% rise in September. Hurricane Harvey dented thousands of new vehicles that were in dealership lots, according to an analysis from Edmunds. Those new cars and trucks were probably ‘scrapped,’ resulting in fresh demand for new vehicles. First Trust NASDAQ Global Auto Index Fund (CARZ - Free Report) can thus gain ahead (read: Harvey: Pain or Gain Ahead for Auto Stocks and ETFs?).
Investors can also have a look at Zacks Rank #1 (Strong Buy) American Axle & Manufacturing Holdings Inc. (AXL - Free Report) . The company is a manufacturer of drivetrain systems and related components. The Zacks Industry Rank of the stock is in the top 20%. It has a VGM (Value, Growth, Momentum) Score of A.
Clothing Vendors
Sales also increased at clothing vendors (up 0.8% in October versus 0.1% in September). Consumers probably started eyeing the holyday season. The National Retail Federation expects retail sales to grow between 3.6% and 4%, totaling $678.75 billion to $682 billion in the November-December period. In any case, this time, Halloween spending probably have jumped three times in the last 12 years (read: No Trick, 4 Halloween ETF & Stock Treats for Investors (Revised)).
This should benefit VanEck Vectors Retail ETF (RTH - Free Report) . Coming to stocks, American Eagle Outfitters Inc. (AEO) can be a good pick. The Zacks Industry Rank is in the top 41%. It is a specialty retailer of all-American casual apparel, accessories, and footwear for men and women. The stock has a Zacks Rank #2 (Buy) and a VGM Score of A (read: Online vs. Offline Retail: Recent ETF Winners).
Electronics and Appliance
Sales for electronics and appliance shot up 0.7% following a 0.3% gain in September. In any case, Electronics is likely to be the top 2017 Black Friday bargains, as per analysts. Salesforce expects Black Friday to be “the busiest digital shopping day” in the history of the United States, surpassing Cyber Monday, as the U.S. digital shopping day for the second consecutive year (read: 3 ETFs to Tap Upbeat Electronics Sales Forecast).
Higher demand from emerging technology applications like tablets and smartphones is a tailwind to the semiconductor space. If this was not enough, NPD Group analyst Mat Piscatella indicated that game sales are likely to see a “nice rebound this year” from last year's unsatisfactory numbers, thanks to a host of “hot titles and new consoles.”
This should boost funds like VanEck Vectors Semiconductor ETF (SMH - Free Report) and ETFMG Video Game Tech ETF (GAMR - Free Report) . As far as stocks are concerned, investors can take a look at Methode Electronics Inc. (MEI - Free Report) . The stock has a Zacks ETF Rank #1 and a VGM Score of B. The Zacks Industry Rank is in the top 3%.
Restaurants
Sales at restaurants and bars increased 0.8% versus 0.1% last month. This may benefit PowerShares Dynamic Food & Beverage Portfolio (PBJ - Free Report) . Investors can also take a look at Zacks Rank #2 Cracker Barrel Old Country Store Inc. (CBRL - Free Report) . The VGM Score is A.
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
October Retail Sales Steady: 4 ETF & Stock Picks
The U.S. retail sector continues to feel the bounce from hurricanes. Sales increased 0.2% sequentially in October 2017, slightly higher than market expectations of no change and after a upwardly revised 1.9% jump in September. On a year-over-year basis, retail sales rose 4.6% following 4.8% gains recorded in September.
Hurricane Harvey flooded Texas at August-end and Irma demolished Florida in early September. So, purchase of new cars, higher replacement demand and a pickup in economic activity was understandable post hurricanes (read: ETF & Stocks to Buy on Rebounding September Auto Sales).
Out of the 13 key sectors, nine registered expansion last month. Below we recommend a few ETFs & stocks that are likely to be the prime beneficiaries of this retail sales improvement.
Auto
A pickup in sales among auto dealerships was noticeable in October, with a 0.7% increase following a 4.6% rise in September. Hurricane Harvey dented thousands of new vehicles that were in dealership lots, according to an analysis from Edmunds. Those new cars and trucks were probably ‘scrapped,’ resulting in fresh demand for new vehicles. First Trust NASDAQ Global Auto Index Fund (CARZ - Free Report) can thus gain ahead (read: Harvey: Pain or Gain Ahead for Auto Stocks and ETFs?).
Investors can also have a look at Zacks Rank #1 (Strong Buy) American Axle & Manufacturing Holdings Inc. (AXL - Free Report) . The company is a manufacturer of drivetrain systems and related components. The Zacks Industry Rank of the stock is in the top 20%. It has a VGM (Value, Growth, Momentum) Score of A.
Clothing Vendors
Sales also increased at clothing vendors (up 0.8% in October versus 0.1% in September). Consumers probably started eyeing the holyday season. The National Retail Federation expects retail sales to grow between 3.6% and 4%, totaling $678.75 billion to $682 billion in the November-December period. In any case, this time, Halloween spending probably have jumped three times in the last 12 years (read: No Trick, 4 Halloween ETF & Stock Treats for Investors (Revised)).
This should benefit VanEck Vectors Retail ETF (RTH - Free Report) . Coming to stocks, American Eagle Outfitters Inc. (AEO) can be a good pick. The Zacks Industry Rank is in the top 41%. It is a specialty retailer of all-American casual apparel, accessories, and footwear for men and women. The stock has a Zacks Rank #2 (Buy) and a VGM Score of A (read: Online vs. Offline Retail: Recent ETF Winners).
Electronics and Appliance
Sales for electronics and appliance shot up 0.7% following a 0.3% gain in September. In any case, Electronics is likely to be the top 2017 Black Friday bargains, as per analysts. Salesforce expects Black Friday to be “the busiest digital shopping day” in the history of the United States, surpassing Cyber Monday, as the U.S. digital shopping day for the second consecutive year (read: 3 ETFs to Tap Upbeat Electronics Sales Forecast).
Higher demand from emerging technology applications like tablets and smartphones is a tailwind to the semiconductor space. If this was not enough, NPD Group analyst Mat Piscatella indicated that game sales are likely to see a “nice rebound this year” from last year's unsatisfactory numbers, thanks to a host of “hot titles and new consoles.”
This should boost funds like VanEck Vectors Semiconductor ETF (SMH - Free Report) and ETFMG Video Game Tech ETF (GAMR - Free Report) . As far as stocks are concerned, investors can take a look at Methode Electronics Inc. (MEI - Free Report) . The stock has a Zacks ETF Rank #1 and a VGM Score of B. The Zacks Industry Rank is in the top 3%.
Restaurants
Sales at restaurants and bars increased 0.8% versus 0.1% last month. This may benefit PowerShares Dynamic Food & Beverage Portfolio (PBJ - Free Report) . Investors can also take a look at Zacks Rank #2 Cracker Barrel Old Country Store Inc. (CBRL - Free Report) . The VGM Score is A.
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 >>