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What Soft Confidence? 3 ETFs & Stocks for Solid Holiday Buying

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Americans may be worried about the near-term prospects of the labor market, but that will probably not curtail their holiday shopping this year. Consumer confidence dropped for the fourth month in a row in November as economic conditions turned feeble toward the end of 2019, per The Conference Board shows.

The board’s consumer confidence index fell to 125.5 this month, down from 126.1 in October and economists’ expectation of a reading of 126.6. The present situation index declined to 166.9 from 173.5 in November.

The gauge that tracks expectations six months from now rose to 97.9 from 94.5. “Overall, confidence levels are still high and should support solid spending during this holiday season,” per the senior director of economic indicators at The Conference Board.

Holiday Season Buying Shaping Up Well, Retail ETFs Beating the Benchmark

NRF expects retail sales in November and December to expand between 3.8% and 4.2%. Consumers are planning to spend $1,048, on average, which is 4% higher than last year. Per NRF, the holiday season runs from Nov 1 through Dec 31, when sales are forecast between $727.9 billion and $730.7 billion.

“”More than half of the consumers have already started their holiday shopping and nearly a quarter of purchases have been made”, according to a survey. On average, consumers had finished 24% of their shopping, marking the highest level in the history of the survey and up from 16% in 2009. Only 4% are fully done with their shopping. NRF estimates that 165.3 million people will hit stores and buy online from Thanksgiving Day through Cyber Monday to avail lucrative deals.

And why not? Stocks are soaring and “big gains in people's portfolios can make them feel more secure about their wealth and their spending.”

Amid this backdrop, investors can play the below-mentioned ETFs and stocks.

ETF Picks

Consumer Discretionary Select Sector SPDR Fund (XLY)

The underlying Consumer Discretionary Select Sector Index seeks to provide an effective representation of the consumer discretionary sector of the S&P 500 Index. The fund added 2.1% in the past week (as of Nov 26), higher than 1.5% gain in the S&P 500. XLY has a Zacks Rank #2 (Buy).


The S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. The fund has a Zacks Rank #2. It has added 4% in the past week.

First Trust Consumer Discretionary AlphaDEX Fund (FXD)

This Zacks Rank #2 fund uses the AlphaDEX stock selection methodology to select stocks from the Russell 1000 Index. The fund has a Zacks Rank #2 and has gained 2.4% in the past week.

Stock Picks

Mastercard Incorporated (MA - Free Report)

Survey says that “credit cards remain the top form of payment at 42%.”

With Mastercard being the second-largest credit card network, investors can bet on the stock. MA has a Zacks Rank #2.The stock comes from a favorable Zacks industry (placed at the top 21% of 250+ industries).

Buckle, Inc. (The) (BKE)

Clothing and accessories are the top gift categories this year, as indicated by 58% of those surveyed.

The Buckle, Inc. is a leading retailer of medium to better-priced casual apparel, footwear and accessories for fashion-conscious young men and women. The stock has a Zacks Rank #1 (Strong Buy).The stock hails from a favorable Zacks industry (placed at the top 19% of 250+ industries).

Activision Blizzard Inc (ATVI)

Digital game-makers are betting on strong holiday sales and raised their end-of-year guidance for revenues and net bookings in recent weeks, per Wall Street Journal.

The company is a leading developer and publisher of console and online games and has a Zacks Rank #2.The stock belongs to a favorable Zacks industry (placed at the top 32% of 250+ industries).

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