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U.S. Retail Sales Steady in June: ETFs & Stocks to Play

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After gaining 1.3% in May, U.S. retail sales registered a 0.5% sequential rise in June. The reading matched analysts’ expectations. Higher sales of motor vehicles mainly kept June retail sales data steady. Notably, the sales growth for May marked the largest increase since September 2017.

Barring automobiles, gasoline, building materials and food services, retail sales were flat in June following a 0.8% uptick in May. On a year-over-year basis, retail sales increased 6.6% in June compared with a 6.5% rise in May.

Eight out of 13 major retail categories exhibited stronger sales in June than the previous month, as per tradingeconomics. Sales at motor vehicle & parts dealers (up 0.9% compared with 0.8% rise in May), gasoline stations (up 1% compared with 3% rise in May), building material stores (up 0.8% after an advancement of 2.5% in May) and online and mail-order retail trade (up 1.3% compared with 0.4% in May) were among the key drivers. Online sales represented the biggest gain since November 2017.

A solid labor market and higher take-home pay amid tax reductions probably drove Americans' ability to spend, helping them to tide over the sudden spike in fuel costs. Against this backdrop, we recommend a few ETFs and stocks that can be investors’ favorites.

Online Stores

Though brick-and-mortar retailers have been steady in recent times, the underlying trend is shifting toward online. Such consistency probably led Amplify Online Retail ETF (IBUY - Free Report) to gain 0.3% on Jul 16. ProShares Long Online/Short Stores ETF (CLIX - Free Report) gained 0.6% on the day.

IAC/InterActiveCorp (IAC - Free Report)

The Zacks Rank #1 (Strong Buy) company is a leading media and Internet company. It comes from a top-ranked Zacks sector (top 13%).

Building Materials

Americans’ intention to buy more building materials puts PowerShares Dynamic Building & Construction Portfolio (PKB - Free Report) in focus. Sales at building material stores have been witnessing continuous growth. The underlying index of the fund consists of stocks of U.S. building and construction companies.

Lennox International Inc. (LII)

The Zacks Rank #2 (Buy) company operates in the heating, air conditioning, and refrigeration markets. The stock belongs to a top-ranked Zacks sector (top 44%).

Auto

First Trust NASDAQ Global Auto ETF (CARZ - Free Report)

Since automobile purchases were the key driver of June retail sales, CARZ deserves a look. The fund has 22.36% exposure to the United States (read: ETFs & Stocks to Buy on Auto Industry's Resilient 1H).

Autoliv Inc. (ALV - Free Report)

The Zacks Rank #1 company operates in the automotive safety industry and is a pioneer in both seatbelts and airbags.

Energy

Oil prices have been steady this year so far. Inflation data also gives cues to that. So, investors can take a look at US Commodity Funds United States Oil Fund (USO - Free Report) (read: How to Play Oil as a Commodity With ETFs).

Delek US Holdings Inc. (DK - Free Report)

The Zacks Rank #1 company is a diversified energy business focused on petroleum refining and marketing and supply of refined products. The stock hails from a top-ranked Zacks industry (top 22%).

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