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.
Retail Sales Worst in April: Least & Most Hurt Sector ETFs
Read MoreHide Full Article
U.S. retail sales declined 16.4% sequentially in April, missing market expectations of a 12% decline. The April figure marked the highest decline ever. This gives a clear sign of the severity of the coronavirus pandemic and the impact of lockdowns.
Consumer spending makes up about 70% of U.S. economic activity. Thus, any contraction in it will likely worsen the economic growth picture. Below we highlight a few areas and the related ETFs that were the most and least hurt.
Industries That Were the Least-Hurt
Online Stores
Non-store retail trade in April jumped 8.4% sequentially and 21.6% year over year. Non-requirement of physical presence amid growing fears of virus contamination has been aiding the space (read: Is Coronavirus a Boon for Online Retail ETFs?).
The underlying index consists of long positions in online retailers included in the ProShares Online Retail Index and short positions in the bricks and mortar retailers included in the Solactive-ProShares Bricks and Mortar Retail Store Index.
Groceries & Healthcare Essentials
Grocery and Health & personal care stores saw a smaller decline of 13.2% and 15.2% sequentially, respectively. Panic buying at the start of the lockdown boosted the sales in March and weighed on April buying.
Amid the ongoing virus scare, soap and clean materials companies like Procter & Gamble Company (PG) , Clorox Company (CLX) and Colgate-Palmolive Company (CL) did well. Staples companies like Costco Wholesale Corporation (COST) and Walmart Inc. (WMT) also stayed afloat as consumers’ need for daily essentials went in their favor.
Consumer Staples Select Sector SPDR ETF (XLP - Free Report) is likely to remain steady amid the market turmoil for the same reason.
Major Losers
Clothing
Many mall-based clothing stores were closed amid lockdowns. Also, increased layoffs and cash crisis will likely weigh on the space in the coming days. Apparel sales fell 78.8% sequentially and 89.3% year over year. in April.
The underlying S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. Apparel Retail takes about 14% of the fund. The fund may face little pain ahead as much of the focus of XRT shifted toward online stores lately.
Furniture and Electronics
Furniture and electronics sales plunged 58.7% and 60.6% sequentially, respectively and 66.5% and 64.8% year over year in April. Home furnishing company Home Depot (HD) have considerable exposure to Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) and VanEck Vectors Retail ETF (RTH - Free Report) .
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
Retail Sales Worst in April: Least & Most Hurt Sector ETFs
U.S. retail sales declined 16.4% sequentially in April, missing market expectations of a 12% decline. The April figure marked the highest decline ever. This gives a clear sign of the severity of the coronavirus pandemic and the impact of lockdowns.
Consumer spending makes up about 70% of U.S. economic activity. Thus, any contraction in it will likely worsen the economic growth picture. Below we highlight a few areas and the related ETFs that were the most and least hurt.
Industries That Were the Least-Hurt
Online Stores
Non-store retail trade in April jumped 8.4% sequentially and 21.6% year over year. Non-requirement of physical presence amid growing fears of virus contamination has been aiding the space (read: Is Coronavirus a Boon for Online Retail ETFs?).
ProShares Long Online/Short Stores ETF (CLIX - Free Report)
The underlying index consists of long positions in online retailers included in the ProShares Online Retail Index and short positions in the bricks and mortar retailers included in the Solactive-ProShares Bricks and Mortar Retail Store Index.
Groceries & Healthcare Essentials
Grocery and Health & personal care stores saw a smaller decline of 13.2% and 15.2% sequentially, respectively. Panic buying at the start of the lockdown boosted the sales in March and weighed on April buying.
Amid the ongoing virus scare, soap and clean materials companies like Procter & Gamble Company (PG) , Clorox Company (CLX) and Colgate-Palmolive Company (CL) did well. Staples companies like Costco Wholesale Corporation (COST) and Walmart Inc. (WMT) also stayed afloat as consumers’ need for daily essentials went in their favor.
Consumer Staples Select Sector SPDR ETF (XLP - Free Report) is likely to remain steady amid the market turmoil for the same reason.
Major Losers
Clothing
Many mall-based clothing stores were closed amid lockdowns. Also, increased layoffs and cash crisis will likely weigh on the space in the coming days. Apparel sales fell 78.8% sequentially and 89.3% year over year. in April.
SPDR S&P Retail ETF (XRT - Free Report)
The underlying S&P Retail Select Industry Index represents the retail sub-industry portion of the S&P TMI. Apparel Retail takes about 14% of the fund. The fund may face little pain ahead as much of the focus of XRT shifted toward online stores lately.
Furniture and Electronics
Furniture and electronics sales plunged 58.7% and 60.6% sequentially, respectively and 66.5% and 64.8% year over year in April. Home furnishing company Home Depot (HD) have considerable exposure to Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) and VanEck Vectors Retail ETF (RTH - Free Report) .
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 >>