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January Retail Sales Strong Despite Shutdown: ETF & Stock Bets

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After a muted December, U.S. retail sales rebounded sharply this year. Sales increased 0.2% sequentially in January 2019 after a 1.6% decline in December and beating market expectations of a flat reading.

Year over year, retail trade rose 2.3% after a downwardly revised 1.6% gain in the prior month.As many as eight out of 13 major retail categories recorded sequential growth in sales. The surge in sales was realized despite government shutdown for almost entire January. The U.S. government opened on Jan 25, 2019 (read: Longest U.S. Government Shutdown: Likely ETF Winners & Losers).

Barring automobiles, gasoline, building materials and food services, retail sales recoiled 1.1% in January after a downwardly revised 2.3% dive in December. Core retail sales throw light on the consumer spending component of GDP more clearly, per tradingeconomics.

A solid labor market and wage gains are enhancing Americans' ability to spend and helped them to tide over shutdown-related uncertainty.

Against this backdrop, we recommend a few ETFs & stocks that can be investors’ favorites.

Online Sales

Online and mail-order retail sales jumped 2.6%, marking the biggest gain since December 2017, after declining 5.0% in December.

Amplify Online Retail ETF (IBUY)

The underlying EQM Online Retail Index utilizes a rules-based methodology to select a globally diverse group of companies with 70% or more of revenues from online and virtual sales (read: Consumer ETFs: Bull Market Winners With Room to Run in 2019).

Insight Enterprises Inc. (NSIT - Free Report)

This Zacks Rank #1 (Strong Buy) company is global direct marketer of brand name computers, hardware and software. It comes from a top-ranked Zacks industry (top 4%).

Broader Retail

Receipts at hobby, musical instrument and book stores jumped 4.8%, marking the largest gain since January 2013, and rebounding from a 6.1% decline in December. Sales at general merchandise also grew 0.8% following a 1.5% drop-off.


The fund gives exposure to an array of retailing, ranging from apparel retailing (24.52%), Internet & Direct Marketing Retail (20.29%), Automotive Retail (15.78%), Specialty Stores (13.23%), Other (6.30%), Department Stores (5.61%) and etc.

Live Nation Entertainment Inc. (LYV)

This is the world's premier live entertainment company, consisting of Live Nation, Ticketmaster and Front Line Management Group. The stock holds a Zacks Rank #2 (Buy) and hails from a top-ranked Zacks industry (top 38%).

Food & Beverage

Sales at food & beverage stores rose 1.1% following a 0.3% slump in December. The rise for food and beverage stores came in at the best since early 2016.

The Organics ETF (ORG)

The underlying Solactive Organics Index tracks the performance of companies globally that are positioned to profit from increasing demand for organic products, including companies which service, produce, distribute, market or sell organic food, beverages, cosmetics, supplements or packaging (read: 4 ETF Ideas to Follow Millennials' Lifestyle).

Starbucks Corporation (SBUX)

This Zacks Rank #1 company purchases and roasts high-quality whole bean coffees and sells them along with fresh, rich-brewed, Italian style espresso beverage and a variety of confections. It comes from a top-ranked Zacks industry (top 39%).

Health & Personal Care

Sales at health & personal care grew 1.6%, after a decline of 2.3%.

The Obesity ETF SLIM

The underlying Solactive Obesity Index tracks the performance of companies globally positioned to profit from servicing the obese, including biotechnology, pharmaceutical, healthcare & medical device company focusing on obesity related diseases, and companies focused on weight loss programs, weight loss supplements or plus-sized apparel.

Rite Aid Corporation (RAD)

The Zacks Rank #2 retail drugstore chain in the United States serving customers in numerous states across the country and in the District of Columbia.

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